Session Overview
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The majority of government revenue earned is not spent on explicitly redistributive programs, such as those discussed in previous lectures about efficiency and equity. In fact, the majority of government revenue earned is devoted to social insurance. Social insurance is designed to insure individuals against risk in cases where the private market may not effectively provide such insurance. In this lecture, we will begin to learn about the role of social insurance. Social Security, launched in 1935, is a US social insurance program. Image courtesy of wisaflcio on Flickr. |
Keywords: Taxation; tax cuts; redistribution methods; categorial cash transfers; social security.
Session Activities
Readings
Before watching the lecture video, read the course textbook for an introduction to the material covered in this session:
- [R&T] Chapter 15, "Public Finance and Public Choice."
Lecture Videos
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View by Chapter
- Asymmetric Information and the Need for Social Insurance (00:16:53)
- Approaches to Social Insurance (00:07:03)
- Negative Effects of Social Insurance (00:05:41)
- Costs of Social Insurance (00:06:04)
- U.S. Social Security (00:13:59)
Check Yourself
Concept Quiz
This concept quiz covers key vocabulary terms and also tests your intuitive understanding of the material covered in this session. Complete this quiz before moving on to the next session to make sure you understand the concepts required to solve the mathematical and graphical problems that are the basis of this course.
Further Study
These optional resources are provided for students that wish to explore this topic more fully.
Other OCW and OER Content
| CONTENT | PROVIDER | NOTES |
|---|---|---|
| 14.41 Public Finance and Public Policy, Fall 2010. | MIT OpenCourseWare | An in-depth course on the government’s role in the economy. |