We study the problem of risk sharing within a household facing subjective uncertainty. A household shares uncertain prospects using a social welfare function. We characterize the social welfare functions such that the household is collectively less risk averse than each member, and satisfies the Pareto principle and an independence axiom. We single out the sum of certainty equivalents as the un...

This paper argues how an increase in minimum wage affects employment, consumption, and social welfare with dynamic general equilibrium model without market frictions. The study demonstrates that a minimum wage hike reduces an actual unemployment rate and has positive effects on an employment rate under the demand-shortage economy whereas they do not under a non-demand shortage economy. The stud...

Article history: Received 15 October 2009 Received in revised form 22 April 2010 Accepted 5 May 2010 Available online 12 May 2010

After the collapse of communism, Eastern and Southeastern European counties have experienced significant changes, especially in terms of transition to market economy was achieved through efforts of liberalization and elimination of all forms of national control. As a consequence, some of the social welfare states in the region, still anchored to the old forms of organization, faced serious diff...

Innovation by users is now understood to be an important part of innovative activity in the economy. In this paper we explore the implications of adding innovation by users to existing models of social welfare that currently assume innovation by manufacturers only. We find this addition removes several inefficiencies, and that social welfare is likely to be increased by the presence of user inn...

In an important contribution to the problem of aggregating infinite utility streams, Svensson (1980) shows the existence of a social welfare relation—a reflexive, transitive and complete binary relation over all possible infinite utility streams—that accommodates the axioms of Pareto and intergenerational equity. This possibility result is in sharp contrast with the seminal contribution by Diam...

Building on the social science literature, we hypothesized that population health indicators in wealthy industrialized countries are 'clustered' around welfare state regime types. We tested this hypothesis during a period of welfare state expansion from 1960 to 1994. We categorized data from 19 wealthy countries into 4 different types of welfare state regimes (Social Democratic, Christian Democ...

In 1996, the United States eliminated the entitlement to cash assistance for low-income citizens with the passage of historic welfare reform. With the institution of time-limits on cash assistance, the policy goals of the socialwelfare system shifted from “income support” to “work support” and the welfare rolls decreased substantially. Although policy goals changed, the service-delivery structu...

This paper considers the social welfare implications of having a public rating agency in-stead of private sector credit rating agencies. The public rating agency is assumed to pay a fix compensation rather than a performance sensitive compensation and is assumed to dismiss its employee in case of "misconduct." The model predicts that the public rating agency may be socially beneficial if invest...