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Welfare State Economics

Course 2017-2018

Admission requirements

Students are highly recommended to have intermediate knowledge on public economics, see e.g. Public Finance of Rosen and Gayer.


Governments implement welfare state programs to protect their citizens to social risks such as falling sick, becoming unemployed, ageing or the occurrence of health costs. These programs, that range from public benefits to the regulation of private insurance markets, may have a strong impact on the income, well-being and the behavior of individuals. Welfare state programs are typically justified by equity and public responsibility, but at the same time the growth of public expenditures force governments to make more efficient use of existing resources. This gives rise to a tension between equity and efficiency considerations.

This course provides an economic perspective on the design of equitable and efficient welfare state programs. The course starts with exploring the fundamental arguments for state intervention and the provision of social insurance, using concepts from insurance theory. Next, attention will be devoted to different welfare state interventions, including cash benefits (such as unemployment insurance, sick pay, disability insurance and pensions) and benefits in kind programs (e.g. health care and labor market programs). Throughout the course, these programs will be assessed along the line of equity and efficiency measures, using insights from the empirical literature on the effect of welfare state interventions on individual behavior and social outcomes.

Course objectives

By the end of this course, students will be able to assess the concepts of the welfare state from an economic perspective:
• Students are able to identify the key equity and efficiency arguments for the provision of various welfare state programs
• Students understand the concepts of insurance theory and their implications for the provision of social insurance.
• Students can critically evaluate empirical applications about individual behavior in the context of the welfare state.
• Students are able to apply their knowledge on real life welfare state programs, of which they can evaluate, judge and communicate their pros and cons.


On the Public Administration front page of the E-guide you will find links to the website and timetables, uSis and Blackboard.

Mode of instruction

The course consists of seminars on the one hand and interactive meetings with student presentations on the other hand. In these presentations, students use articles and reports, so as to critically assess the provision of welfare state programs in various countries.

Course Load

  • Total course load 140 hours
  • Hours spent on attending seminars 14 (7 x 2 hours)
  • Hours spent on attending interactive meetings 14 (7 x 2 hours)
  • Written exam 3 hours
  • Time for studying compulsory literature and completing assignments 109

Assessment method

Gradings will be based on presentations and on participation during the lectures and the interactive meetings (25% weight), together with an exam at the end of the course (75% weight). We offer a re-examination for the written exam, but not for presentations. Note that an insufficient score for the written exam – i.e., lower than 5.5 – cannot be compensated by a high score for the presentations and participation.


Blackboard will be available one month before the start of the course.

Reading list

N. Barr (2012), Economics of the Welfare State, fifth edition, Oxford University Press

Journal papers are announced later on blackboard.


Use both uSis and Blackboard to register for every course.

Register for every course and workgroup via uSis. Some courses and workgroups have a limited number of participants, so register on time (before the course starts). In uSis you can access your personal schedule and view your results. Registration in uSis is possible from four weeks before the start of the course.

Also register for every course in Blackboard. Important information about the course is posted there.


Marike Knoef (