A social, or socioeconomic, model, is the value system associated with the structure of a nation's political economy. There are no set rules that define a social model, only loose definitions characterized by certain attributes.
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How the state taxes the people, be it a flat tax, regressive tax or a progressive tax system. Most common guiding rule of taxation is to levy taxes by the ability to pay.
How the state implements benefits for the unemployed, pensions, maternity and paternity leave and disabilities.
Services such as health care can be almost entirely state funded at one extreme, private insurance-based on the other, or somewhere in between. For example, the United Kingdom has an almost entirely publicly funded health service, the National Health Service (NHS), and Canada offers public health care offered at a provincial level. Conversely, in the United States, individuals have to rely on health insurance policies in the event of hospitalization, and a minimal amount of state support for the poorer people exists. Another element can be public transport, as some countries have nationalized rapid transit systems, while others have privatized them (in the UK for example, public transport has been privatised in Great Britain but not in Northern Ireland).
Economies with a more laissez-faire approach to employment will do nothing to provide job security. Other countries will rely on some degree of regulation to protect workers from arbitrary firings. A high degree of regulation such as expensive severance fees is often cited reason for making employers reluctant to hire and causing unemployment.
Used by the UK and Ireland, the Anglo-Saxon tend to have a welfare state of roughly average size, relative to high-income OECD countries, but less comprehensive than those in Scandinavia and much of continental Europe. They have somewhat more poverty and higher inequality. Despite having a smaller welfare state than most Western European countries, the UK, Ireland and Canada do provide, among other things, universal single payer health care, redistribute income and guarantee an income at subsistence level.[1]
Used by Austria, France, Germany, Belgium and Luxembourg, the Continental model has strict rules on job protection and a large amount of regulation in industry. However, the labour market has proven to be inflexible and slow to react to globalization. Generous insurance-based unemployment benefits and a well funded welfare state are used to reduce poverty and provide high quality health care. This model can generally be seen as middle ground between the Anglo-Saxon and Nordic model.
Used by Italy, Spain, Greece, Portugal, the Mediterranean model is similar to the Continental model, but focuses welfare on generous state-pensions. The labour market is inflexible with the same job protectionism as in the Continental model, but is not good at reducing poverty within the lower end of society.
The Nordic Model, mainly refers to Nordic countries Norway, Sweden, Denmark, Iceland, Finland but some include the Netherlands[2], also called 'Nordic corporatist' model because of strong influence of the corporatist elements such as labor unions and employers' organizations, advocates a highly developed and government-funded welfare state which provides generous unemployment benefits among other resources for the general public. Labor markets are kept mobile with easy firing and hiring, and government taking care of those laid off with unemployment benefits and retraining. The equality of the Nordic model is achieved through progressive taxation. As a result of the policy, Sweden, Denmark and Norway have the lowest income disparities in the world. Nordic countries have been enjoying high economic and productivity growth, but most remarkably they conquer consistently top spots in world happiness surveys.[3][4]