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PublicationBook chapter

Digitalization and the Challenges to Finance Public Welfare: The Case of Sweden

Abstract

The chapter analyzes how digitalization and globalization challenge states’ ability to tax income and thereby finance public welfare. As work, consumption, and value creation increasingly take place without geographical presence, the link between tax bases and national jurisdictions weakens. This applies both to multinational firms and to individuals with greater opportunities for remote work.

With a focus on Sweden, the chapter discusses how a tax system characterized by high taxes on labor, lower taxation of capital, and a decentralized welfare model may be particularly vulnerable. It highlights the need for adjustments to the tax system in order to maintain legitimacy, efficiency, and the financing of the welfare state in a digital economy.

Hansson, Å. (2026). Digitalization and the Challenges to Finance Public Welfare: The Case of Sweden. In: Hansson, Å., Wernberg, J. (eds) Taxation in the Digital Era. Palgrave Macmillan, Cham.

Similar content

Article (with peer review)

Aging in place or moving on? Exploring older homeowners’ housing situation in the context of housing market dynamics and policy incentives

Dahlgren, D., Magnusson, L., Hansson, Å., Schmidt, S.M., Iwarsson, S. & Kylén, M.

Publication year

2026

Published in

Housing and Society

Abstract

Housing preferences in later life vary, and housing decisions are complex. While much attention has been paid to health and accessibility, less is known about how financial factors influence housing decisions among older homeowners. This qualitative study aimed to deepen understanding of how single-family homeowners aged 55 and older reason about their housing situation. We conducted focus groups with 30 participants from four Swedish municipalities, selected for their distinct demographic and housing market characteristics. Content analysis revealed a central theme: The many benefits of living in the current house outweigh economic and local housing market challenges. This theme emerged from four categories: (1) Desire to stay in place; (2) Discrimination toward older homeowners; (3) Local and national housing market conditions; (4) Reflecting on the future housing situation. The study demonstrates that preferences for aging in place are shaped by health status, emotional attachment, and financial concerns. Participants often viewed relocation as financially disadvantageous, and a limited supply of suitable housing and perceived lack of political prioritization further constrained their possibility of moving. These findings suggest a potential mismatch between housing policy goals and homeowners’ preferences, underlining the need for planning strategies that reflect local realities and support aging in place.

Article (with peer review)

Does Access to Housing Wealth Relax Liquidity Constraints for Entrepreneurs? Evidence from Sweden

Publication year

2026

Published in

Nordic Journal of Surveying and Real Estate Research, 19(1)

Abstract

Liquidity constraints are often seen as a barrier to entrepreneurship, with many relying on personal or informal capital to start a business. This paper examines whether increased access to equity — via rising value of owner-occupied housing — affects the likelihood of business entry. Using detailed Swedish tax return data and exploiting the 2008 property tax reform as a natural experiment, we analyze how changes in house prices influence entrepreneurial activity. While higher housing prices correlate with business ownership and entry, this relationship disappears when isolating the causal effect of the tax reform. These findings contrast earlier findings and suggest that the value of owner-occupied housing proxy for individual characteristics rather than easing liquidity constraints, indicating that such constraints are not a major barrier to entrepreneurship in Sweden.

From Near and Afar: How Digitalization Is Shaping the Economic Geography and Conditioning Regulation.

Joakim Wernberg

Publication year

2025

Published in

Palgrave Macmillan

Abstract

Kapitlet analyserar hur digitalisering förändrar den ekonomiska geografin och därmed utmanar traditionella reglerings- och skattesystem. Wernberg visar hur teknologisk utveckling stegvis omformar värdeskapande genom att minska transaktionskostnader, skapa globala marknader även för små företag och flytta produktion och energiåtgång till platser långt från användaren. Fem strukturella skiften lyfts fram: marknadsexpansion genom digital uppkoppling, växande betydelse av immateriella tillgångar och molntjänster, digitala plattformars nya konkurrenslogik, omstrukturering av arbete via AI och distansarbete samt ökade ömsesidiga beroenden mellan länder. Dessa processer gör värde och arbete allt mindre knutet till fysisk närvaro, vilket skapar växande spänningar i regelverk baserade på territoriell suveränitet. Wernberg avslutar med att digitaliseringens ackumulerade effekter sannolikt kräver betydande reformer, särskilt inom internationell beskattning.

Details

Author: Åsa Hansson
Publication year: 2025
Published in: Taxation in the Digital Era. Palgrave Macmillan, Cham.