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The fifth edition of this successful textbook discusses the different parts of the welfare system, in particular, cash benefits, health care and education. The text argues that the welfare state does not exist only to help the underprivileged, but also for reasons of efficiency, in areas where private markets would be inefficient or would not exist at all. Suitable for economics students and for students on related disciplines such as social policy and political economy, this book is accessible and contains a non-technical appendix to each of the theory chapters, diagrams, additional readings, worked examples and end of chapter discussions. Online Resource Centre For students: - Web links - Further reading - Links to related Oxford Scholarship Online titles For lecturers: - PowerPoint slides - these have been expanded for the fifth edition