My research agenda with digitalization is continuing but is shifting focus from the economy as a whole to what it means for the future of the welfare state. The work is planned as a book in English and aimed for an international audience.
A brief description of my research agenda is as follows. The welfare state has managed to reinvent itself in the last decades but is now faced with the twin challenges of a large number of low skilled immigrants as well as the effects of digitalization changing the nature of work and putting pressure on tax bases. The challenges come on top of already high taxes in Sweden and other welfare states, with further spending pressures from aging populations.
The book will explore what these challenges mean for social welfare states characterized by high taxes, extensive public welfare services and a labor market with large collective bargaining agreements that cover virtually the whole economy. The main perspective is on Sweden but will the issues are also relevant for other Scandinavian countries and for Northern European countries, especially Germany and the UK.
The welfare state has proved remarkably resilient despite increased globalization and international competition. Similar to to the bumble bee that should not be able to fly, the Swedish economy has performed well and is one of the few countries with low public debt and sustainable public finances even after the global financial crisis in 2007-09.
The welfare state has survived the last decades through a combination of reforms, but digitalization now presents a new form of challenge that will yet again require a transformation. Government revenue from tax on labor may be under pressures as tax bases become more mobile, resulting in additional strain on financing public welfare over and above that stemming from aging populations. There are also changes brought about by the rise of the sharing/gig economy with more temporary work, self-employment, such as work in the cloud and automation of also tasks requiring high skill. Moreover, rising consumer surplus from productivity growth and quality may reduce incentives to work as living standards are already high.