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Figure of the Month

The Nordic Model of Economic Development and Welfare

Note: The figure plots the country average (1970-2013) for the OECD gross earnings interdecile ratio P90/P10 against the average value of the combined welfare generosity index from the Comparative Welfare Entitlements Dataset.

Sources: L. Scruggs, D. Jahn, K. Kuitto: Comparative Welfare Entitlements Dataset 2 Codebook, Version 2014-03, 2014; OECD.Stat earnings database, available at http://stats.oecd.org/.

This figure from Robert Iacono’s article The Nordic Model of Economic Development and Welfare: Recent Developments and Future Prospects from our current issue shows that the high welfare spendings in the nordic countries correlate with a low wage dispersion.