Conclusion - Arguments for a welfare state
5 important questions on Conclusion - Arguments for a welfare state
Which two aspects stand out?
- Debates about ideology
- The welfare state's functional purposes, notably economic efficiency
What are standard assumptions to reach efficiency?
By market allocation, in a competitive environment with no market failures and no significant information failures.
Some individuals must be risk averse if insurance is to be efficient and there must be no technical problems.
What is the problem with text-decorationinsurance and consumption smoothing with regard to the policy?
Social policy is made subservient to technical considerations. People are protected against income losses, but strict adherence to market suply enables them to acquire protection only when risks can be covered by actuarial mechanisms. A bridge is needed between the two sets of issues.
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What are the advantages of a welfare state?
- It adresses major issues of market failure
- It achieves equity objectives that many people support
- It contributes to important broader objectives such as social cohesion
Why is the welfare state no complete solution?
It does little to reduce unemployed people, to improve working conditions or to give minorities more chances on the labour market. (only makes unemployement more bearable)
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