Redistribution, Inequality and Nordic Welfare States: Challenges in a Global World

As elsewhere, inequality has increasingly been on the agenda in recent years in Denmark, which has led to discussion about the redistributive role of welfare states across existing welfare regimes. Perhaps surprisingly, the Danish debate on inequality has revolved more specifically around how the country's tax system influences labour supply, especially the high level of marginal income taxation. The debate on poverty and inequality has become more prominent in Denmark in recent years, with a focus on the living standards of pensioners and children as well as the dynamic relationship between inequality and social policy. Thus, if there is a willingness to reduce inequality, a central challenge is to determine which instruments are available to counter rising inequalities in Denmark. In this context, the interaction between the issue of poverty and political support for specific social policies in Denmark is a challenge. Overall, the analysis suggests that tax reforms focusing on labour market supply have helped increase inequalities, thus indicating a possible trade-off between different aspects of welfare state development. Furthermore, the universality of the Danish model might be questioned in the coming years, which might also imply a debate on the generosity of a number of social security benefits, including those targeting the unemployed.