Digitalization, Immigration and the Welfare State

The modern welfare state finds itself in the middle of two major upheavals: the impact of technology and immigration. Similar to Germany, Sweden has taken in more refugees per capita than most other countries. As a result, the pillars of the Swedish welfare state are being shaken, and digital technologies are set to strengthen already existing trends towards job and wage polarization. The development of skills to keep pace with technology will enter into a critical period for the labor market in which inadequate policy responses could result in further inequality and polarization. In this regard, a platform-based labor market could help by opening up a vast range of new work opportunities. Tax bases could erode as input factors in production become more easy to shift. What are the implications of these trends that drive change in developed economies and, in particular, the impact that they have on Sweden and other European countries with rigid labor markets and comprehensive tax-financed welfare services?