The welfare state in the 2010s – what time has it come to?

Other Publications, Reports 30 Heikki Taimio (eds.)

In Finland, the share of the public sector in the economy has remained broadly stable at around 20 percent over the past 25 years. It has increased significantly only during two deep recessions, when GDP has contracted by several percent.

The combined public and private net social expenditures relative to GDP are slightly above the OECD average, but clearly lower than in countries such as the United States, Germany, France, and the United Kingdom.

Increasing public consumption and investment would have significant stimulative effects on the economy and could even improve the fiscal position of the public sector. Finland’s tax system has increased income inequality and distorted the allocation of investment. The level of basic social security for citizens has generally weakened since the mid-1990s. Finnish labour markets are relatively flexible in OECD comparisons. (AI translation)

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