The Concept of the Welfare State - Essay Example

Year of Study: Semester: Welfare Throughout the period after the war, there were many attempts to reformulate education in U.K. This study assesses empirical evidence whereupon it analyses the impact of some key reforms that were ideally formulated to serve a number of specific problems that education in the U.K faced which primarily were fallen standards in learning institutions as well as the low retention of students in schools after age 16, the significantly poor basic attitudes, skills and knowledge that characterised the U.K population and lastly, the relentless dissimilarities in tertiary level education. Introduction to welfare The concept of the Welfare State, as Barr (2004) postulates, lacks precision and as such no single faceted definition can be best termed as best describing it. The reason behind the above statement is as a result of the fact that welfare stems its meaning from an array of sources that go beyond activities that fall within the province of the state. Moreover, there are a whole range of modes for delivering services to citizens that are deemed welfare services. Some of the services that are entailed in the welfare kitty are funded by the state but the same state does not produce this services. Some of the services are produced publicly but their delivery is free. Some of the services are brought by the private sector with some acquired by persons whereupon they get financing from the state. Despite the fact that the limits of welfare are not clearly stated the concept of the welfare state is used as a diminutive hand for the activities of the state in 4 wide areas. Barr (2004) postulates that primarily, these services are education and healthcare as well as housing, food and other services that are enjoyed on welfare. Our study will be based on education. The major aims of the Welfare State are best described under 4 general groups. Welfare ideally, is formulated with the objective of supporting living standards, and diminishing the inherent inequalities and by doing so it strives to desist from cost explosion as well as deters actions that are conducive to adverse selection as well as moral hazard. All the above stated aims of the Welfare State are achieved through maintaining administrative costs on the low as well as structuring the welfare system with models that do not condone abuse of power by those that are charged with running the welfare system. The road that led to assenting to the above objectives in the U.K commenced with the liberal reforms in 1906 to nineteen fourteen as Marcuzzo (1996) observes. The kingdom was not fully committed to these reforms in their inception and it was until the period starting from 1944-1948 that legislation was passed which ideally derived the majority will that stemmed from the experience of second world war and the repercussions of the war. The first decade of the twentieth century, primarily perceived new liberalism as an ideology which was set on the premise that for nations to foster the element of individual freedom, the state was obligated to take active roles in the process of social reform. As such, the resulting new measures led to the introduction of progressive taxation, unemployment benefits and insurance, sickness benefits as well as pensions simultaneously. As Barr (2004) observes, despite this noble endeavour, the reforms that were undertaken were on a small scale with limited scope of coverage. Fewer reforms were derived during the period between wars with the exception of housing in addition to unemployment insurance. The benefits that individuals were entitled to as a result of unemployment were always in danger of surpassing contributions as the rate of unemployment was ever increasing. At the end of the 20s the political arena was characterised with two lines of policy which primarily concerned unemployment benefits financing while the other major concern was to do with lowering the escalating unemployment rate. By the beginning of 1930, qualification requirement for eligibility into the unemployment benefits program were tightened and four years later, upon passing the Unemployment Act, unemployment benefits were de-linked from measures that supported individuals who were unemployed for a long time. As such, the welfare state in the 30s was in abeyance and fresh guidelines were just an attempt to manage the inherent crisis and accordingly when intervention came, by virtue of war production and rearmament, the problem of unemployment disappeared. As Barr (2004) observes, it was an unhappy methodology of managing the undesirable period in the U.K’s social policy. In this environment, a significant breakthrough came with the Beveridge Report of 1942. As postulated in the Beveridge Report (1942, p. 5), it was based on 3 pillars which were comprehensive healthcare as well as family allowances and full employment. Social insurance embraced both scope of person as well as needs, where upon every individual had to pay a single security contribution by way of a stamp on a given single insurance document in a week. With regard to unemployment benefits as stipulated in Beveridge (1942, p. 9-10), as well as benefits to persons with disabilities in addition to retirement benefits after a lapse of a stated transitional period, these were calculated at the same rate regardless of earnings that had been acquired previously. The system was to be centrally controlled and funded through equal remittances from employers, the state and employees with the equivalent benefits maintained at a material subsistence level. The major ideal of the report, as postulated by Frazer (2003) was to centrally provide want, attack squalor, disease, idleness and ignorance. After the war, the public demanded for peace and tranquillity with the many veterans that were returning home, there was a need for the welfare state. The people wanted homes for their war heroes which led to the massive buildings project under Macmillan in the era of 1954. Case Study: Education in the U.K Education as a Merit Service Ideally, education is a merit good, as it is a good which provides returns that are primarily benefits to the society in its entirety as Begg, Fisher and Dornbusch (2003) observe. Primarily, the principle of public good and merit good is the basis for identification of the differences that exist in service sectors. In economics, public goods are characterised as non-excludable and they are also non-rivalled. As such, this definition has the implication that the consumption of the service by a given individual does not result into reduced supplies of the service for the benefit of others. The underlying concept thus is that every individual has access to the service and therefore no one can be excluded from it. A good example of a public service is the provision of infrastructure such as roads. Road users in the U.K use the road by virtue of being within the jurisdiction of the Kingdom. No single person in the U.K, under normal circumstances, is excluded from using the services of roads. Every citizen is entitled to using it whether he has paid for it or not as Hughes (2003) observes. Education on the other hand, as stated earlier qualifies as a merit good. The principle of a merit good stipulates that individuals are entitled to services out of need as opposed to the ability to pay for it doubled by willingness as Begg, Fisher and Dornbusch (2003) observe and as such, they are services that can not be dealt away with as they come across as necessities in life. Excluding these services from access of the public is detrimental to the society both morally and economically. Market reforms The problem According to Machin and Vignoles (2006), in addition to worries regarding broadening access as well as educational disparities, there arose prevalent fears concerning low standards of education in the U.K. Primarily there arose worries that a significant majority of U.K students were dropping out of school at a younger age whereas they had little knowledge of critical life skills. First and foremost, despite the fact that the rate of retention at the age of sixteen (the compulsory age for leaving school in the U.K) was on the increase over some time, by international standards, it was relatively low as described in OECD (2005). Secondly there were also increased worries about the stagnated achievement that characterized school results especially in the compulsory phase. The proportion of students that succeeded in their exams at the age of sixteen remained stagnated from the period around 1970 towards the middle of the 80s. As such, in the 80s, not only were half the students abandoning education on fulltime basis altogether, but they were also leaving without any qualifications. Studies by the London Business School revealed that more than 2/3 of the cohort underachieved in exams at age 16 and as result joined the labour market yet they did not have any academic qualification. A significant majority of this individuals proceeded with vocational training though the prevalent perception among educational policy makers in the U.K acknowledged that the country had a problem with its problem of a long tail of achievement as Machin and Vignoles (2006) observe. The policy With regard to these concerns, consecutive conservative governments, in the 80s as well as 90s, heightened the rate of reform through introduction of market mechanisms into education in the U.K. This was an attempt to coerce learning institutions to lift their standards. The endeavour of a quasi market in the U.K education sector was commenced by a critical legislation, Education Reform Act 1988. This Act, according to Le Grand (1991, 1993) and Adnett and Davies (2002), not only introduced reforms in the national curricula but also attempted market reforms. The concept of reforms that were ideally market oriented were focused towards increasing parental options and as a result improve the accountability of schools that were state funded. Parents and guardians of respective students in public schools could, at least in theory, have a choice in the school that their child went to and also claim a spot on the school’s board of governance. Funding of schools was also closely related to the number of students that were enrolled in the said schools. With the new Act, some schools were also given authority to control their own budgets and moreover, these schools were directly funded by the central government which contrasted with the old system where local governments control the schools. The end result was increased autonomy in the schools operations with particular consequence to students that were admitted into the schools. There are major limitations to the functioning of the U.K’s education system of quasi market. Firstly schools are not permitted to be insolvent and consequently, closing operations; moreover a significant majority of parents and guardians do not have full information on the quality of the schools that their children attend. Consequently, this weakens the ability of schools to improve. Getting a clear understanding of the exact nature of the inducements that the schools are given is also a problem in theory. Literature on delivery of services to the public as postulated by Besley and Ghatak (2003) and Dixit, (2002) suggests that arriving at the objectives of decision makers in schools is quite an uphill task. Primarily, schools are not like the private sector, where firms objectively endear their effort towards maximizing profits. Contrastingly, in learning institutions, both school principals and teachers differ with regard to objectives that the school is set to fulfil. Of course, there exists an array of outputs from the system of education, which range from advancing scores, to embedding a love for education in learners. As such, as Besley and Ghatak (2003) postulate, the most important issue that policy makers in education face today, is to formulate the best means by which incentives as well as accountability and competition can be teamed up to promote outcomes in education in a wider sense. The question whether this has been achieved in the U.K is based on empirical evidence. The Evidence By virtue of the ensuing discussion, it is not surprising that one of the major concerns in the U.K is the unanticipated effects of incentives of the conducted market reforms. Evidence from studies, primarily from the U.S, for instance, Hoxby (2000, 2003a, 2003b), bears evidence of the fact that improved competition in schools as well as moves to diffuse education funding centrality are aides in enhancing attainment though they derive inequality as a consequence effect as wealthy parents are posited well in taking advantage of a more market oriented system. This assumption has a productivity cost facet to it whereupon bright students that stem from families that are primarily poor economically lag behind. In the U.K context, this is absolutely critical with regard to its tail of underachieving students an aspect that is prevalent amongst its disadvantaged students. Empirical evidence bears the reality that manifest themselves on the ground, for instance, economic groups that fall in the upper level, according to West and Pennell, (1999) appear have access to better information concerning their understanding of performance of schools via league tables. If affluent parents make their decisions based on this information, whereupon they choose best schools for their children, it follows that there is strain between strategies that are ideally endeared towards diminishing prevalent inequality. The student’s socio-economic background is also inextricably bound to the quality of schools that the students attend and consequently their performance. As Feinstein (2003) observes, attendance of schools which have few students that come from lower socio economic families is highly beneficial academically. If parental choice results into increased socio-economic isolation across learning institutions, such effects of peer groups will act to foster socio-economic disadvantage. Curriculum Reform In addition to worries about student participation as well as test scores, educational policy makers in the U.K have also recognised that the country has a significant problem with its basic skills. Literacy survey Percentage of adults at IALS Level Two or above Numeracy Literacy Age-16-25 Age-26-35 Age-36-45 Age-16-25 Age-26-35 Age-36-45 Britain 78 80 81 83 82 83 Belgium (Flanders) 93 91 83 92 88 80 Netherlands 92 93 90 92 94 91 Switzerland (German) 93 87 81 93 83 76 Ireland 82 80 77 84 84 79 Sweden 95 96 93 96 95 93 Source: OECD: 1995:152-154 (on the basis measurement of Quantitative Literacy by IALS.) The above table displays the basic level skills in literacy and numeracy by age group that was retrieved from the International Adult Learning Survey (1995). Primarily the table displays the percentage of adults with literacy as well as numeracy at IALS second level or beyond which by dint of policy makers was defined to be the lowest level of skills that were needed for effective functioning in the labour market. With respect to workers of middle age, the U.K comes around as average when it is weighed against other IALS nations. However, unlike in other nations, among young workers, literacy and numeracy levels in the U.K start to fall. This suggested that education system in the U.K was becoming increasingly less effective with regard to production of employees with sufficient basic skill levels. The policy To efface the issue of diminished numeracy and literacy in the U.K, policy makers introduced two critical national policies. Firstly in the 80s, a standard national curriculum was introduced concerning learners aged between seven and sixteen years. The purpose of the national curriculum was to increase standards through ensuring that all learners studied a recommended subject set to a minimum level until they attained the age of sixteen. In 1998, the government introduced National Literacy and Numeracy Strategies which had to with allocation of a section of the daily curriculum of all primary schools to numeracy and literacy hours. This was aimed at developing pupil’s basic skills. Machin and Vignoles (2006, p. 8) postulate that despite the fact that the U.K’s national curriculum was a model of a highly central policy of education, which contrasted it to the devolved accountability and power that characterized previously described market reforms, it generated increased information for the guardians and parents on each schools quality. As such, the national curriculum as Machin and Vignoles (2006) observe, together with the accompanying regime of testing also acted to enhance the operation of the quasi market. To grasp the need for tightly prearranged curriculum for the U.K by education policy makers as well as a daily lesson plan at the elementary level, it is critical to consider closely the labour market as concerns teachers. Currently, there are severe problems, in enticing highly qualified students into the teaching profession in the United Kingdom as Chevalier and Dolton (2005) observe. On a short term basis, the prevalent hypothesis was that prescribing what teachers were obligated to impart in learners would raise the standards of education in the U.K whereupon it was imperative in the absence of effective teachers. Despite this endeavour the policy makers agree that it is critical to establish teaching as a respected profession. This long run objective needs policy makers in education to reformulate the remuneration package for teachers as Chevalier and Dolton (2005) observe. The evidence Given the fact that the national curriculum was established in the U.K at the national level, a clear and robust assessment of its impact has been extremely difficult. Despite this fact, effectiveness of the literacy hour since it was introduced through a pilot program has been confirmed. Machin and McNally (2004) assessed the economic viability of the National Literacy Project. Their findings suggested that improvement the delivery of the teaching process, in this case through, the literacy hour is bound to provide a cost effective means of attaining pupil attainment. Conclusion Despite the fact that it is hard to conclusively know the impact of the national curriculum in the U.K with regard to the achievement of pupils, the fact that literacy hour has proved to be effective in enhancing the reading skills of students in primary schools is evident. It is also evident that some vocational qualifications initiated in recent years for instance, NVQ2, have not attracted any value in the labour market and as such, such reforms were not successful in this dimension. Paying young learners from disadvantaged families is likely to boost their morale and as such, they are enticed to stay on in school. Despite policies such as the expansion of H.E, young students from disadvantaged families are still less likely to proceed on with tertiary education and of more concern is the trend of the 80s and 90s where the gap between the rich and the poor broadened. This is as a result of the education inequalities that characterised the education system earlier. REFERENCES Adnett, N. & Davies, P. (2002). Markets for Schooling. London: Routledge. Barr, N. (2004). The economics of the welfare state. 4th (ed): Oxford: Oxford University Press. Beveridge, W. B. (1942). Social Insurance and Allied Services. London: HMSO. Beveridge, W. B. (1944). Full employment in a Free Society. London: Allen & Unwin. Begg, D., Fisher, S. & Dornbusch, R. (2003). Economics. (7th ed). London: McGraw. Besley, T. & Ghatak, M. (2003). Incentives, Choice, and Accountability in the Provision of Public Services: Oxford Review of Economic Policy, 19, pp. 235-249. Chevalier, A. & Dolton, P. (2005). ‘The Labour Market for Teachers” in Machin, S. and A. Vignoles (eds.). What’s the Good of Education? The Economics of Education in the United Kingdom. Princeton: Princeton University Press. Dixit, A. (2002). “Incentives and Organizations in the Public Sector.” Journal of Human Resources. 37, pp. 696-727. Feinstein, L. (2003). Inequality in the Early Cognitive Development of British Children in the 1970. Cohort: Economica. 70, pp. 73-97. Hoxby, C. (2000). Does Competition Among Public Schools Benefit Students and Taxpayers? American Economic Review, 90, pp. 1209-38. Hoxby, C. (2003a). The Economics of School Choice. Chicago: Chicago University Press:. Hoxby, C. (2003b): School Choice and School Competition: Evidence from the United States: Swedish Economic Policy Review, 10, pp. 9-66. Hughes O. E. (2003), Public Management and Administration (3rd edition): New York: Harper Collins Le Grand, J. (1991, Equity and choice. London, Harper Collins. Le Grand, J. (1993): Quasi-markets and social policy. London: Macmillan. Machin, S & Vignoles, A. (2006). Education Policy in the U.K.: London: London Centre for the Economics of Education, London School of Economics. Marcuzzo, M.C. (1996). Keynes and the Welfare State. Rome. Università di Roma. La Sapienza. OECD (Organisation for Economic Co-operation and Development) (2005): Education at a Glance. Paris: OECD. West, A. & Pennell, H. (1999): School Admissions: Increasing Equity, Accountability and Transparency: British Journal of Education Studies, 46, pp. 188-200. Read More