Abstract

The chapter assesses the challenge of globalization for the sustainability of the Nordic welfare states. It discusses the role of globalization in an observed trend towards higher inequality in the Nordic countries; whether globalization has put more pressure on minimum wages; whether the Nordic countries face a ‘race to the bottom’ of taxes; and, finally, whether these countries face problems with competitiveness and economic performance. Based on analysis of data over several decades it appears that globalization seems overall to offer more opportunities than threats. There is hardly any evidence that globalization leads to much larger wage dispersion, and the Nordic countries have so far kept up with the challenge of high minimum wages. When considering the challenges of taxes and competitiveness, the comprehensive Nordic welfare states perform better than most countries. Public attitudes towards globalization are generally positive. The biggest challenges appear to be integration of low-skilled immigrant refugees in the workforce, and to maintain high minimum wages.