Social and Behavioral Sciences Commons^™

Expanding The Welfare System, Michael J. Orszag, Dennis Snower

Dennis Snower

The proposal involves the establishment of “welfare accounts” for every person in a country. There are to be four accounts: a retirement account (covering pensions), an unemployment account (covering unemployment support), a human capital account (covering education and training), and a health account (covering insurance against sickness and disability). Instead of the current welfare state systems - where welfare services are financed predominantly out of general taxes - people would make ongoing, mandatory contributions to each of these welfare accounts. The balances in these accounts would cover people’s major welfare needs. The government is to set mandatory minimum contribution rates …