250,054 research outputs found

    Developments in asset-based welfare policy

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    At the time of the Pre-Budget Report, the Treasury published a second consultation document discussing two proposed asset-based welfare policies, the Saving Gateway and the Child Trust Fund. These are intended to ‘extend the benefits of saving and asset-ownership more widely’.1 In this chapter, we consider each of these two policies in turn. We discuss what the new document tells us about the policies and then consider what issues remain to be resolved before the policies are implemented

    Home-ownership and asset-based welfare: the case of Belgium

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    In this article, using policy documents and both qualitative and quantitative data sources, we evaluate the extent to which the Belgian welfare system conforms to trends towards asset-based welfare involving the promotion of home-ownership as an alternative to social security provision. We conclude that, following the explicit and ongoing sponsorship of home-ownership since the end of the 19th century, in Belgium, an asset-based approach to welfare has actually been in place for some time. Most Belgian elderly people are income-poor (mainly due to low public pensions) but asset-rich. While the risk of poverty for home-owners in old age is somewhat higher than that for the general population, it is much higher for elderly renters. As far as the preconditions for a possible restructuring of the Belgian welfare state in the direction of greater reliance on asset-based welfare are concerned, we find that most of them are fulfilled. Public debt is high with increasing costs of population ageing looming large on the economic horizon. However, although some politicians have raised the issue, so far, virtually no initiatives have been taken to tap into existing housing wealth. Our qualitative evidence shows that this can be partly explained by the fact that Belgians have a rather conservative attitude towards the welfare state, which is expected to provide adequately for 'traditional' life-course risks such as unemployment and old age. Housing is considered a private issue, separated from the social security sphere

    Gordon Brown's misplaced Smithian appeal : the eclipse of sympathy in changing British welfare norms

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    Gordon Brown has eagerly lauded his fellow Kirkcaldy citizen, Adam Smith, as his main policy inspiration. This article tests the rigour of such a claim by matching Brown's promotion of Smithian ‘sympathy’ as the centrepiece of his programme for government with the changes introduced by his Treasury to the British welfare model. In the 1970s, Thomas Wilson showed that the traditions of the post-war British welfare state were compatible with a modified form of Smithian sympathy socialised at the level of the state. New Labour has set about reforming the welfare model with respect to both its underlying institutions and the basic subjectivities of its recipients. I show that Brown's substantive preference for an asset-based system of welfare moves those subjectivities away from the ‘relational self’ of Smithian sympathy and towards a much more ‘autonomous self’. Consequently, I conclude that it is stretching Smith's concept of sympathy too far, even in a modified socialised form, to associate it with New Labour's asset-based system of welfare

    Property-based welfare and the search for generational equality

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    In many countries, the demographic shift towards an ageing population is occurring against a backdrop of welfare state restructuring. The paradigm of asset-based welfare may become increasingly central to these developments as individualised welfare is touted as part of the response to the challenge of funding the care of an ageing population. This article focuses on the framing of housing wealth as a form of asset-based welfare in the UK context. We consider the strengths and weaknesses of housing as a form of asset-based welfare, both in terms of equity between generations and equality within them. We argue that housing market gains have presented many homeowners with significant, and arguably unearned, wealth and that policy-makers could reasonably expect that some of these assets be utilised to meet welfare needs in later life. However, the suitability of asset-based welfare as a panacea to the fiscal costs of an ageing population and welfare state retraction is limited by a number of potential practical and ethical concerns

    Planning for a future of asset-based welfare? New Labour, financialized economic agency and the housing market

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    This article focuses on core aspects of the political economy of New Labour and surveys the strategic priorities to which it is likely the planning process will have to adapt. As with other policy areas, the effects of enhanced Treasury micro-management of the Government's reform agenda has begun to impact upon the field of planning. The prime example in this respect is the Treasury's preference for replacing state provision of welfare-enhancing services with the move towards an individualized system of asset-based welfare. The article begins with an analysis of this shift, showing how it is dependent on creating financialized economic agents who think instinctively as active saver-investors in their quest to accumulate assets to fund future consumption of welfare. In contemporary Britain the housing market dominates the accumulation of assets amongst everyday saver-investors. The article concludes by analysing the possible tension that will be introduced into the planning process because of New Labour's twin goals: (1) to defend the current value of asset wealth even as the mortgage lending market has stalled and confidence in the stability of house prices has temporarily evaporated; and (2) to restrict exclusion from private ownership in the housing market so that broadening access can be used to propel a universal move towards an individualized system of asset-based welfare. The fallout from the world credit crunch, which began in autumn 2007 and remains ongoing at the time of writing in January 2009, looks likely to exacerbate what was always a tension-prone combination of objectives

    The Risk Premium for Equity: Explanations and Implications

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    The equity premium puzzle shows that using standard parameters and setup, the Consumption-based Capital Asset Pricing Model's (CCAPM's) prediction of the premium associated with systematic risk is out by an order of magnitude.The object of this paper is to consider the implications of each of the broad classes of explanations of the equity premium puzzle for resource allocation, welfare and policy.We argue that the most robust implications are those that flow directly from the high price of systematic risk and are therefore independent of the resolution of the puzzle.risk premium;equity capital;resource allocation;welfare;capital asset pricing

    Creating a poverty map for Azerbaijan

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    'Poverty maps' - graphic representations of spatially disaggregated estimates of welfare - are increasingly used to geographically target scare resources. But their development in many low resource settings is hampered due to data constraints. Data on income or consumption are often unavailable or direct survey estimates for small areas yield unacceptably large standard errors. Census data offer the required level of coverage but do not generally contain appropriate information. Alternative methods aim either at combining survey data with unit record data from the Census to produce estimates of income or expenditure for small areas or at developing alternative welfare rankings, such as asset indices, using existing census data. This paper develops a set of poverty maps for Azerbaijan. Two alternative approaches are adopted. First, a map is constructed using an asset index based on data from the 1999 Census to produce reliable estimates of welfare at the raion level. Second, an alternative map is derived using imputed household consumption, combining information from the 2002 Household Budget Survey (HBS) with 1999 Census data. This provides a unique opportunity to compare the welfare rankings obtained at the regional level under the two approaches

    Adverse Selection, Liquidity, and Market Breakdown

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    This paper studies the interaction between adverse selection, liquidity risk and beliefs about systemic risk in determining market liquidity, asset prices and welfare. Even a small amount of adverse selection in the asset market can lead to fire-sale pricing and possibly to a market breakdown if it is accompanied by a flight-to-liquidity, a misassessment of systemic risk, or uncertainty about asset values. The ability to trade based on private information improves welfare if adverse selection does not lead to a market breakdown. Informed trading allows financial institutions to reduce idiosyncratic risks, but it exacerbates their exposure to systemic risk. Further, I show that in a market equilibrium, financial institutions overinvest into risky illiquid assets (relative to the constrained efficient allocation), which creates systemic externalities. Also, I explore possible policy responses and discuss their effectiveness.Financial institutions; Financial markets; Financial stability

    Home ownership and asset-based welfare

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    The future of welfare: a Theos collection

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    Adrian Pabst and John Milbank argue against the social and economic liberalism that has dominated post-war Britain, in favour of a more mutualist vision. The welfare settlement, they argue, has tended to function as a substitute for high employment, decent jobs, and widespread asset ownership – the statist model effectively (and ironically) propping up the free market one. In its place, they call for “responsible reciprocity”, a mutualised welfare settlement that is personal, local and participatory. This would demand a renewal and extension of Attlee’s original idea of a unified insurance-based social security system alongside a ‘preferential option for the poor’, moving away from means-testing, putting in place what they call a Mutual Jobs Fund, and developing locally-based welfare schemes that embed people in meaningful relationships of reciprocity