Fazeli, Reza and Fazeli, Rafat (2011) The welfare state and the market economy: the American and German experiences of social policy. In: The 5th International Scientific Conference "Entrepreneurship and Macroeconomic Management: Reflections on the World in Turmoil".
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This paper reviews the recent development of the welfare state and social policy in the United States and Germany. The empirical study is primarily based on the comparative study of the trends of the "social wage" and the "net social wage" in the two countries over the last two decades. The paper addresses two major questions. The first question is whether the expansion of social expenditures has posed any drag on capital accumulation and economic growth in these two countries. The second question is whether the increasing ideological challenges from the right and the competitive pressures of globalization have led to retrenchment of the American and German welfare states in the recent decades.
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