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Social Insurance as an Efficiency Device*

Published online by Cambridge University Press:  28 November 2008

Nicholas Barr
Nicholas Barr
Affiliation:
Economics, London School of Economics and Political Science
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Abstract

Irrespective of views about equity, social insurance has a major efficiency role. Because of technical problems in private markets, neither unemployment nor inflation are risks against which private markets can supply actuarial insurance, and medical insurance cannot cover all risks for all types of individual. The existence of social insurance is therefore supported on the grounds that it does things which private, actuarial insurance would either not do at all or would do inefficiently.

Type
Articles
Information
Journal of Public Policy , Volume 9 , Issue 1 , January 1989 , pp. 59 - 82
Copyright
Copyright © Cambridge University Press 1989

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