The Welfare State as Piggy Bank by Nicholas Barr
Information, Risk, Uncertainty, and the Role of the State

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Of the many functions of the welfare state, two are particularly prominent: the 'Robin Hood' function - the provision of poverty relief, the redistribution of income and wealth, and the reduction of social exclusion; and the 'piggy bank' function - ensuring mechanisms for insurance and for redistribution over the life cycle. The piggy-bank function, unlike the redistributive purpose of the welfare state, has received relatively little attention, and is not widely
understood. This book redresses the balance. Nicholas Barr's central contention is that---contrary to popular opinion---the welfare state exists for reasons additional to poverty relief. These reasons - encapsulated by the piggy-bank function - arise out of pervasive problems of imperfect information,
risk, and uncertainty. Even if all poverty and social exclusion could be eradicated, people would still need to insure themselves and to redistribute over the life cycle. As a result, Barr argues, the welfare state is here to stay, since twenty-first century developments do nothing to undermine these reasons. He also explores ways in which the welfare state can and will adapt to economic and social change, including specific, and sometimes novel, solutions.

The analysis in "The Welfare State as Piggy Bank" is international, applying to advanced industrial countries, as well as addressing post-communist countries, and touching upon middle-income developing countries. Barr's approach is contemporary and forward-thinking. His discussion ranges over a number of topics of central relevance to life in the twenty-first century, including genetic screening and its impact on insurance; the convergence of private and social insurance; how to finance
long-term care; pension reform in the light of fluid family structures and a mobile workforce; loans for financing investment in human capital; and new ways of involving private finance in tertiary education.

About Nicholas Barr

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Nicholas Barr is Professor of Public Economics at the LSE and the author of books and articles including The Economics of the Welfare State. He has spent periods of leave at the World Bank, working on the post-communist transition countries, and at the IMF. Since the late 1980s, he has been active in the debate on higher education, advising government in a range of countries including England, Australia, New Zealand and Hungary.Iain Crawford is a former Parliamentary Candidate and former Head of Public Relations at the London School of Economics. He has been active in the UK debate on higher education since the late 1980s and has advised the Hungarian government on the design of a student loan scheme.
Published May 10, 2001 by OUP Oxford. 332 pages
Genres: Business & Economics, Political & Social Sciences, Education & Reference. Non-fiction

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