The fifth edition of this successful textbook discusses the different parts of the welfare system and, in particular, cash benefits, the health service and education. The text argues that the welfare state does not exist just to help the underprivileged, but also for means of efficiency, in areas where the private markets would be inefficient or would not exist at all. Suitable for both economics students and students on related disciplines, this book is accessible and contains a non-technical appendix in every chapter, diagrams, additional readings, worked examples and end of chapter discussions.