9.Ibid.
10.Kleven, “How Can Scandinavians Tax So Much?”
11.Philipp Doerrenberg et al., “Nice Guys Finish Last: Do Honest Taxpayers Face HigherTax Rates?,” Kyklos 67, no. 1 (February 2014): 29-53. Available online at http://dx.doi.org/10.1111/kykl.12042,
12.S. H. Baker, “The Determinants of Median Voter Tax Liability: An Empirical Test of the Fiscal Illusion Hypothesis,” Public Finance Quarterly 11, no. 1, (1983): 95–108.
13.James M. Buchanan, Fiscal Theory and Political Economy: Selected Essays, 2nd ed. (Chapel Hill: University of North Carolina Press, 1960).
14.Bertil Ohlin, “Ny ‘Osynlig’ Moms,” Dagens Nyheter, March 28, 1973.
15.Tino Sanandaji and Björn Wallace, “Fiscal Illusion and Fiscal Obfuscation – Tax Perception in Sweden,” Independent Review 16, no. 2 (Fall 2011): 237–46. This is in line with international studies about indirect taxation. Jean-Robert Tyran and Rupert Sausgruber, for example, show that “tax burden associated with an indirect tax is systematically underestimated, whereas this is not the case with an equivalent direct tax.” Tyran and Sausgruber, “Testing the Mill Hypothesis of Fiscal Illusion,” Public Choice 122, no. 1 (2005): 39–68.
16.Particularly the young had a limited knowledge about the actual rate. Two-thirds of young respondents believed that the tax rate was 30 percent or less. Nima Sanandaji, “Underskattade Skatter – en Undersökning av vad Svenska Folket Tror om Skatternas Omfattning” (Understated Taxes – an Examination of What the Swedish People Think about Taxes Extent), Confederation of Swedish Enterprise, August 2015, http://www.svensktnaringsliv.se/material/rapporter/underskattade-skatter-en-undersokning-av-vad-svenska-folket-tror_624361.html. The first survey in 2003 was carried out by my brother Tino Sanandaji and his coauthor, Björn Wallace, while I conducted the follow-up survey in 2015. Both surveys influenced the debate about taxation in Sweden.
CHAPTER 6: THE NORDIC FREE-MARKET SUCCESS STORY, AND THE FAILURE OF THIRD WAY SOCIALISM
1.David Kenstenbaum, “Denmark Thrives Despite High Taxes,” NPR, January 29, 2010, http://www.npr.org/templates/story/story.php?storyId=123126942.
2.Subhash Thakur et al., Sweden’s Welfare State: Can the Bumblebee Keep Flying? (Washington, DC: International Monetary Fund, 2003).
3.J. P. Beddy, “A Comparison of the Principal Economic Features of Eire and Denmark,” Journal of the Statistical and Social Inquiry Society of Ireland 27 (1943): 189–220.
4.Ibid.
5.K. O’Rourke, “Late Nineteenth Century Denmark in an Irish Mirror: Land Tenure, Homogeneity and the Roots of Danish Success,” in J. C. Campbell, A. Hall, and O. Pedersen, eds., The State of Denmark: Small States, Corporatism and the Varieties of Capitalism (Montreal: McGill-Queen’s University Press, 2006).
6.K. H. O’Rourke, “Property Rights, Social Cohesion and Innovation: Evidence from the Creameries,” mimeo, Trinity College, Dublin, 2003.
7.See, for example, Hull Kristensen, “Denmark: An Experimental Laboratory for New Industrial Models,” Entrepreneurship & Regional Development 1, no. 3 (1989): 245–55.
8.Nima Sanandaji, “Entreprenörer som går mot strömmen. Vad 90-talskrisens succéföretagare kan lära om dagens utman-ingar,” Fores, 2010.
9.Based on author calculations and A. Maddison, “Historical Statistics of the World Economy: 1–2008 AD” (2010), data file downloaded April 21, 2016, from http://www.ggdc.net/maddison/Historical_Statistics/horizontal-file_02-2010.xls.
10.Ibid.
11.“What Makes Nordic Countries the Envy of the World,” Economist, February 2, 2013.
12.M. Henrekson, “Välfärdsstaten och Entreprenörskapet,” IFN Policy Paper no. 16 (2007).
13.S. Axelsson, “Entreprenören från sekelskifte till sekelskifte – kan företag växa i Sverige?”, in Dan Johansson and Nils Karlsson, eds., Svensk utvecklingskraft (Stockholm, Ratio, 2006). In 2004, thirty-eight of the one hundred businesses with the highest revenues in Sweden were entrepreneurial, that is to say, started as privately owned businesses within the country. Of these firms, twenty-one were founded before 1913. Additionally, fifteen were founded between 1914 and 1970. Only two had been formed after 1970. If the one hundred largest firms are instead ranked according to how many people they employed, none of the largest entrepreneurial firms were founded after 1970.
14.See, for example, A. Lindbeck, “The Swedish Experiment,” Journal of Economic Literature 35 (1997): 1273–1319.
15.Based on author calculations and Maddison, “Historical Statistics.”
16.Based on author’s calculations and from the OECD Stat Extract. Growth in GDP per capita, productivity and ULC. GDP per capita, constant prices. Data downloaded February 16, 2016.
17.Shortly before the transfer of power to the new reformist government, the Swedish business daily Dagens Industri had a headline reading, “Sweden Is the World Champion in ‘Jobless Growth.’” “Sverige världsmästare i ‘jobless growth,’” Dagens Industri, January 27, 2006.
18.Carl Magnus Bjuggren and Dan Johansson, “Privat och offentlig sysselsättning i Sverige 1950–2005” (Private and Public Employment in Sweden 1950–2005), Ekonomisk Debatt (Economic Debate) 1, no. 1 (2009): 41–53; Frida Nannesson, “Privat och Offentlig Sysselsättning” (Private and Public Employment), Ekonomifakta, data gathered February 16, 2016, from http://www.ekonomifakta.se/sv/Fakta/Arbetsmarknad/Sysselsattning/Privat-och-offentlig-sysselsattning--historiskt/.
19.Olle Krantz, “Svensk ekonomisk tillväxt under 1900–talet – en problematisk historia” (Swedish Economic Growth during the 1900s – a Problematic History) Ekonomisk Debatt, no 1. (1997), http://www.nationalekonomi.se/filer/pdf/28-1-ok.pdf.
20.See, for example, Anders Johnson, “Tidernas entreprenörer i Sverige,” Gleerups Utbildning (2006).
21.Ola Honningdal Grytten, “Why Was the Great Depression Not so Great in the Nordic Countries?: Economic Policy and Unemployment,” Journal of European Economic History 37, no. 2/3 (2008): 369–93, 395–403. One explanation is that Nordic countries had had a crisis before the Great Depression, which partially prepared them for what was to come.
22.“Arbetskraftsundersökningar (AKU)” (Labour Force Survey [LFS]), http://www.scb.se/AKU/; Statistics Sweden, 2009, Sysselsättningen i Sverige [Employment in Sweden] 1963–2008.
23.Kalle Bengtsson, Claes Ekström, and Diana Farrell, “Sweden’s Growth Paradox,” McKinsey Quarterly (June 2006): 6, http://www.workforall.org/assets/Sweden_GrowthParadox.pdf.
24.Seppo Honkapohja Erkki Koskela, “The Economic Crisis of the 1990s in Finland,” Economic Policy 14, no. 29 (October 1999): 399–436.
25.Klas Fregert and Jaakko Pehkonen, “Causes of Structural Unemployment in Finland and Sweden 1990–2004,” in Lars Jonung, Jaakko Kiander, and Pentti Vartia, eds., The Crisis of the 1990s in Finland and Sweden: The Nordic Experience of Financial Liberalization (Northampton, MA: Edward Elgar, 2008).
26.Bengtsson, Ekström, and Farrell, “Sweden’s Growth Paradox,” 5. The report notes that the government at the time only counted 239,000 individuals as unemployed but that additionally 106,000 people were on government labor market programs. There were also 140,000 so-called “latent job candidates,” individuals who were classified as not being in the labor force but who wanted to work and could start working within 14 days (e.g. full-time students who would rather work). Including these groups, the unemployment number would have risen to 485,000 (10 percent of the labor force). Additionally, Sweden had 132,000 under employed individuals and 215,000 people able to work but excluded from the official labor force statistics. The latter figure included people in early retirement or on prolonged sick leave beyond Sweden’s normal historic levels from the 1970s. Adding all above groups, the total unemployment figure was found to be fully 832,000, or 17 percent of the labor force (p. 5, exhibit 4).
27.Jan Edling, Alla Behövs: Blott Arbetsmarknadsåtgärder Skapar Inga nya Jobb (2005), http://www.timbro.se/pdf/Alla_behovs_2.pdf; Agenda för Sverige (2005), http://aof.nu/Agendaf%C3%B
6rSverige.pdf.
28.See for example Confederation of Swedish Enterprise (2006) and Herin et al. (2006).
29.Lars Ljungqvist and Thomas J. Sargent, “Hur Sveriges arbetslöshet blev mer lik Europas,” in NBER report Att Reformera Välfärdsstaten: Amerikanskt Perspektiv på den Svenska Modellen (Reforming the Welfare State: American Perspective on the Swedish Model), by Richard B. Freeman, Birgitta Swedenborg, Robert Topel, eds. (Stockholm: SNS Förlag, 2006), 109–22, http://www.sns.se/sites/default/files/kr-2006-rapport.pdf.
30.Susanne Spector, “Den verkliga arbetslöshetens utveckling sedan 1996,” Confederation of Swedish Enterprise, 2014, http://www.svensktnaringsliv.se/migration_catalog/Rapporter_och_opinionsmaterial/Rapporter/den-verkliga-arbetsloshetens-utveckling_599841.html/binary/Den%20verkliga%20arbetsl%C3%B6shetens%20utveckling. In 2013, the latest available year, it was 14 percent, compared with the official statistics of 8 percent.
CHAPTER 7: WHY ARE SO FEW NORDIC WOMEN AT THE TOP?
1.Many respond that women have advantages in terms of being organized and compassionate leaders. Pew Research Center, “Women and Leadership,” January 14, 2015, http://www.pewsocialtrends.org/2015/01/14/women-and-leadership/.
2.World Economic Forum, “The Global Gender Gap Report 2014,” http://reports.weforum.org/global-gender-gap-report-2014/.
3.Saadia Zahidi, “What Makes the Nordic Countries Gender Equality Winners?,” HuffPost Impact: The Blog, October 24, 2013 http://www.huffingtonpost.com/saadia-zahidi/what-makes-the-nordic-cou_b_4159555.html.
4.Katrin Bennhold, “In Sweden, Men Can Have It All,” New York Times, June 9, 2010, http://www.nytimes.com/2010/06/10/world/europe/10iht-sweden.html?_r=0.
5.Agence France-Presse, “Swedish Fathers to Get Third Month of Paid Paternity Leave,” Guardian, May 28, 2015, http://www.theguardian.com/world/2015/may/28/swedish-fathers-paid-paternity-parental-leave.
6.Gabrielle Jackson, “Force Men to Take Paternity Leave. It Will Make the World a Better Place,” Guardian, April 9, 2015, http://www.theguardian.com/commentisfree/2015/apr/10/want-better-dads-happier-mums-and-healthier-kids-make-men-take-paternity-leave.
7.During the battle of Dorostolon, Kievian Rus forces – who were essentially Swedish Vikings with a strong presence in today’s Russia – invaded present-day Bulgaria. A counteroffensive by the Byzantine Empire dealt a devastating defeat to the Vikings. The Byzantine were stunned at discovering armed women among their fallen enemies. D. Harrison and K. Svensson, Vikingaliv (Fälth & Hässler, 2007).
8.See Marianne Moen, “The Gendered Landscape: A Discussion on Gender, Status and Power Expressed in the Viking Age Mortuary Landscape” (master’s dissertation, University of Oslo, 2010), 5, 30, https://www.duo.uio.no/bitstream/handle/10852/23050/ThexGenderedxLandscape.pdf?sequence=2.
9.Anders Johnson, De gjorde skillnad: liberala kvinnor från Anna Maria Lenngren till Marit Paulsen (Stockholm: Folkpartiet Liberalerna, 2011).
10.Kari Melby, Anna-Birte Ravn, and Christina Carlsson Wetterberg, Gender Equality and Welfare Politics in Scandinavia: The Limits of Political Ambition? (Bristol, UK: Policy Press, 2009).
11.Anita Lignell Du Rietz, Svenskornas Företagsamma Historia [Swedish Hosts Enterprising History] (Stockholm: Timbro, 2009).
12.Based on information taken from the International Labour Organization, Women in Business and Management Gaining Momentum (ILO, 2015), http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_334882.pdf.
13.Eurostat, ”The European Structure of Earnings Survey,” 1995.
14.T. Iversen, F. Rosenbluth, and D. Soskice “Women and the Service Sector,” memo for UCLA Postindustrial Working Group, April 18–19, 2004.
15.Magnus Henrekson and Mikael Stenkula, “Why Are There So Few Female Top Executives in Egalitarian Welfare States?” Independent Review 14, no. 2 (Fall 2009): 243, 264, https://www.independent.org/pdf/tir/tir_14_02_05_henrekson.pdf.
16.Monica Renstig, “Equal Opportunities in Sweden? Women Can Have a job but Forget The Career,” in Alexander Hughes European Newsletter no. 31, 2008.
17.Richard Anker, Gender and Jobs: Sex Segregation of Occupations in the World (Geneva: International Labour Office, 1998), 48; emphasis in original.
18.Nordic Innovation Centre, Women Entrepreneurship – A Nordic Perspective (Oslo: Nordic Innovation Centre, 2007), 12–13, http://www.nordicinnovation.org/Global/_Publications/Reports/2007/women_entrepreneurship_final_report_web.pdf.
19.Matti Alestalo, Sven E. O. Hort, and Stein Kuhnle, The Nordic Model: Conditions, Origins, Outcomes, Lessons (Hertie School of Governance Working Paper no. 41, June 2009), 16, https://www.hertie-school.org/fileadmin/images/Downloads/working_papers/41.pdf.
20.M. Lundbäck, for example, shows that public ventures are worse at implementing innovations and increase their efficiency compared to private firms. Lundback, “Vinster av konkurrenssättning av den offentliga sektorn,” in Den svenska tillväxtskolan: om den ekonomiska utvecklingens kreativa förstörelse (The Swedish Growth School: Of the Economic Development of Creative Destruction), eds. Dan Johansson and Nils Karlsson (Stockholm: Ratio, 2002).
21.Eva M. Meyersson Milgrom, Trond Petersen, and Vemund Snartland, “Equal Pay for Equal Work? Evidence from Sweden and a Comparison with Norway and the U.S.” Scandinavian Journal of Economics 103, no. 4. (December 2001): 559–83.
22.OECD, Government at a Glance 2015 (OECD, 2015).
23.The Swedish Agency for Public Management, Den offentliga sektorn i korthet 2014 (STATKONTORET, 2014).
24.Johan Kreicbergs and Carl Oreland, “Nyföretagande inom den offentliga sektorn – ett lyft för kvinnor” (Business creation in the public sector – a raise for employees), Svenskt Näringsliv (2009), http://www.svensktnaringsliv.se/migration_catalog/Rapporter_och_opinionsmaterial/Rapporters/nyforetagande-inom-den-offentliga-sektorn-ett-lonelyft-for-de-ans_529836.html/BINARY/Nyf%C3%B6retagande%20inom%20den%20offentliga%20sektorn%20-%20ett%20l%C3%B6nelyft%20f%C3%B6r%20de%20anst%C3%A4llda.
25.Julia Dawson, Richard Kersley, and Stefano Natella, The CS Gender 3000: Women in Senior Management (Zurich: Credit Suisse Research Institute, 2014).
26.Kenneth R. Ahern and Amy K. Dittmar, “The Changing of the Boards: The Impact on Firm Valuation of Mandated Female Board Representation,” Quarterly Journal of Economics, 127, no. 1. (2012): 137–97.
27.Marianne Bertrand et al. “Breaking the Glass Ceiling? The Effect of Board Quotas on Female Labor Market Outcomes in Norway” (National Bureau of Economic Research Working Paper No. 20256, 2014), 2, https://www.utexas.edu/cola/_files/jd25763/norway_boards_5_2014.pdf.
28.“Norway’s Female Boardroom Quotas: What Has Been the Effect?” Nordic Labour Journal (May 21, 2015).
CHAPTER 8: GENEROUS WELFARE TRAPS FAMILIES IN WELFARE POVERTY
1.Franklin D. Roosevelt, Annual Message to Congress, January 4, 1935, American Presidency Project, accessed February 16, 2016, http://www.presidency.ucsb.edu/ws/?pid=14890.
2.See Friedrich Heinemann, “Is the Welfare State Self-Destructive? A Study of Government Benefit Morale,” Discussion Paper No. 07-029 (ZEW [Centre for European Economic Research], 2008), http://ftp.zew.de/pub/zew-docs/dp/dp07029.pdf; Kyklos 61, no. 2 (2008): 237–57
3.Erns Fehr and Urs Fischbacher, “Social Norms and Human Cooperation,” Trends in Cognitive Sciences 4 (2004): 185–90.
4.Heinemann, “Is the Welfare State Self-Destructive?”
5.Ronald Reagan, Radio Address to the Nation on Welfare Reform, February 15 1986, American Presidency Project, accessed February 16, 2016, http://www.presidency.ucsb.edu/ws/?pid=36875.
6.Ibid.
7.Heinemann, “Is the Welfare State Self-Destructive?”
8.World Value Survey data for question V198: Justifiable: claiming government benefits. See http://www.worldvaluessurvey.org/wvs.jsp.
9.Jean-Baptiste Michau, “Unemploymen
t Insurance and Cultural Transmission: Theory and Application to European Unemployment,” CEP Discussion Paper No. 936, Centre for Economic Performance, London School of Economics and Political Science, London, UK (2009).
10.Martin Halla, Mario Lackner, and Friedrich G. Schneider, An Empirical Analysis of the Dynamics of the Welfare State: The Case of Benefit Morale, IZA DP No. 4165 (Institute for the Study of Labor, 2010), 14, http://ftp.iza.org/dp4165.pdf.
11.Assar Lindbeck, “Hazardous Welfare-State Dynamics,” American Economic Review 85, no. 2 (1995): 9–15; Assar Lindbeck, “Prospects for the Welfare State,” seminar paper no. 755, Stockholm: Institute for International Economic Studies, Stockholm University, January 31, 2008.
12.Lindbeck, “Prospects for the Welfare State.” It is worth noting that Nordic countries have relatively large shadow economies compared with countries such as the United States. Scandinavian shadow economies have reduced as a share of total GDP over time, coinciding with a shift towards greater economic freedom: see Friedrich Schneider and Colin C. Williams, The Shadow Economy (London: Institute of Economic Affairs, 2013), http://www.iea.org.uk/sites/default/files/publications/files/IEA%20Shadow%20Economy%20web%20rev%207.6.13.pdf.
13.Arne Modig and Kristina Broberg, Är det OK att sjukskriva sig om man inte är sjuk? (Stockholm, TEMO, 2002), http://www.svensktnaringsliv.se/migration_catalog/ar-det-ok-att-sjukskriva-sig-fast-man-inte-ar-sjuk_525675.html/binary/%C3%84r%20det%20OK%20att%20sjukskriva%20sig%20fast%20man%20inte%20%C3%A4r%20sjuk-.
14.Peter Skogman Thoursie, “Reporting Sick: Are Sporting Events Contagious?” Journal of Applied Econometrics 19 (2004): 809–23.
15.Malin Persson, Korta sjukskrivningar under fotbolls VM 2002 – en empirisk studie (Nationalekonomiska Institutionen, Uppsala University, 2005). In both cases, the sickness rate among women is used as a control for other variations.
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