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Wealth and Welfare States What Is the Real Story By Irwin Irv Garfinkel and Timothy Smeeding October 6 2010 Irwin Irv Garfinkel is Mitchell I Ginsberg Professor of Contemporary Urban Problems at the Columbia University School of Social Work and co director of the Columbia Population Research Center Timothy Smeeding is director of the Institute for Research on Poverty and Arts and Sciences Distinguished Professor of Public Affairs at the La Follette School of Public Affairs and Economics at the University of Wisconsin Madison and founder and director emeritus of the Luxembourg Income Study Wealth and Welfare States What Is the Real Story Many believe the following three statements to be true The welfare state undermines productivity and economic growth The United States has an unusually small welfare state And the United States is and always has been a welfare state laggard This paper is based largely on our book entitled Wealth and Welfare States Is America A Laggard or Leader Garfinkel Rainwater and Smeeding 2010 with some updated for recent events The paper shows that all three propositions are false All rich nations including the United States have large welfare states because the socialized programs that constitute the welfare state public education and health and social insurance enhance the productivity of capitalism and spur economic development In public education the most productive part of the welfare state for most of the nineteenth and twentieth centuries the United States was the world leader but is no longer Though few would argue that public education is not part of the welfare state most previous cross national analyses of welfare states have omitted education Including education as part of the welfare state has profound consequences undergirding the case for the productivity of welfare state programs and the explanation for why all rich nations have large welfare states as well as identifying US welfare state leadership In the first section of the

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