So in this course we're talking about values and comparative social welfare, and in the last video lecture I talked about the measuring the value of social welfare by size. So we had this kind of straddling discovery, that whether you're measuring it by just public expenditures, or even including employer based expenditures, the US has a very large commendable welfare state. So in this section we’re going to talk about the welfare state by structure. And so the structure of the welfare state includes pensions for the disabled and for the elderly. It includes health and the the provision of healthcare across the society. It includes education. And then it includes other cash benefits that come for student aid for instance, benefits that come for disaster relief in cash, and then there are benefits that come in kind. And these are benefits like being given a subsidized department or benefits like being given a food stamp voucher to go to the grocery store to buy food. These are in kind benefits. And over the course of this sequence, we'll talk quite a lot more about each of this. And so, when we look at this at the nature of the structure of benefits, you'll see here the same chart that you saw on the last video of lecture, although there are two significant differences. In this chart, we're talking about not the number of US dollars, but the percent of the gross domestic product of the nation. So let's just look at what implications that has. So, remember when we talk about the actual expenditures the US dominated. But now that we're talking about percentage of the gross national product, how much of what we actually have as rich nation are we spending on benefits? You'll see here that the United States is providing less than Australia, less than Canada, more than Ireland, less than the United Kingdom, less than Belgium, France, Italy, Germany, the Netherlands and Spain. So, what's being said here is that because the United States is so rich, it can spend a great deal of money in terms of welfare state benefits. Which amounts to a smaller proportion of what the government spends and what the country spends as a whole in its gross domestic product. So the US has a very generous social welfare system, but in comparison to how much, what percentage of what we have we spend, we actually spend less. So that's the first point from the slide, the second point from the slide gets us into this structure issue. So, red is pension, white is health, yellow is education, green is other cash and blue is in kind. So if we go to the United States without employer benefits, you'll see that we spend about 5% of GDP on pensions, about 6 or 7% of GDP on health, about another 6 or 7% of GDP on education. And then we spend a percentage and a half on cash benefits and a percentage on incurring benefits. If we add employer benefits this goes quite a bit and there is a large amount of pension benefits that are provided by employers, and a great deal of health benefits. So we are comparing this box to this box and you can see it's almost twice as big, because a great deal of US health care is provided through the work place. Not surprisingly education stays pretty much the same. There is a rise in other cash benefits. And these are benefits that come from the workplace that are like paid child care support, paid sick days, those kind of benefits that come as cash. So you will see that the US spends relatively the same amount on pensions, health, and education and the government level. But when we go include the private level we spend much more on pensions and health and less on education. So let's compare this to the nation that' next door, which is Britain. So, the United kingdom spends much more in pensions both in terms of without employer benefits here, and with employer benefits here. The UK provides it's health care by a central government activities, so these boxes are the same, and they're roughly the same size as what the US government is spending on healthcare. But they are much smaller than what the US Government and employer based health care is spending. So this is the entire expenditure in United Kingdom on health care, and this is the entire expenditure in the United States, so you can see it's much smaller. Education is provided publicly with little employer involvement in both nations, and we spend somewhat more in the United States. And you see this pattern in the UK of employer-provided cash benefits, sick days, vacation days, so forth, as being quite large. So, overall, the UK is spending more money, more of a percentage of it's GDP by government's spending, and also when you add employer benefits. Although, a smaller proportion is employer benefits, and that they are spending more on pensions, less on healthcare, and slightly less on education. So lets pick another nation here and think about France. And you'll see that France here has almost identical expenditures on pensions, whether or not they are coming in players or not. Which means the pension system in France is almost entirely based on government support. There is a small addition in healthcare here that comes from private employers. Education looks very similar in boxes, and there's quite a lot of employer based benefits. Sick days, child care benefits and so forth. Now, overall, France is spending more on pensions than United States, even when we consider our employer benefits. They're spending much less on health care. So this is the US expenditure in health care, this is the French expenditure in health care. And they're spending roughly the same on education. This yellow boxes are, it's hard to tell exactly what they mean here, but they are roughly the same. .And then they have significant amount of employer provided cash benefits, and cash benefits that are provided by the government to pay for various things like housing vouchers, childcare, and so forth. So, what we see here is a pattern in the United States of spending somewhat less on pensions, somewhat more on health care, somewhat less, about the same in education. And then a lot less in this green area, which includes support for poor families, support for disabled people, support for homeless people, all of the areas where cash would make a difference in people's lives. So, the US makes clear and concrete choices in our social welfare system. The first and most obvious choice here is the choice to have much more of it done in the private sector than in the public sector. And the second is to spend less on pensions and more on health care. And to spend significantly less on income support programs for people that are not old or disabled, but are otherwise poor. So we'll look at, in the next video lecture, a discussion about the outcome effects of these differences. But you can see that whereas we all have very large welfare states, the US having a very large one, we make different choices about where to invest our dollars, our resources in this welfare state.
