The purpose of the paper is to assess the theory that the downside risk insurance provided by more generous welfare states generates long run efficiency gains, which counterbalance the short run efficiency losses caused by work disincentives in these states (Feldstein 1974, 1976; Sinn 1995, 1996)....

A crucial debate in policy-making as well as academic circles is whether there is a trade-off between economic efficiency and the size/generosity of the welfare state. One way to contribute to this debate is to compare the performance of "best cases" of different types of state. Arguably, in the...

Cover -- Half-title -- Title -- Copyright -- Contents -- Preface -- Acknowledgments -- 1 Introduction -- 1.1 Dry statistics / real lives -- 1.2 Welfare states / welfare regimes -- 1.3 Our aims and methods: ethics, institutions and panels -- 1.4 Our focus: three countries, ten years -- 1.5 The...