This book focuses on the effects of welfare state arrangements on the dynamics of poverty in Europe. The author contends that the EU is primarily based on economic integration and as a result social policy issues have remained secondary considerations. The question of whether or not there is a role for the EU to play in social policy is answered in Didier Fouarge's investigation of the constructive and restrictive characteristics of subsidiarity.Using long-running panel data from three distinctive EU welfare states (the Netherlands, Germany and Great Britain), as well as data from the European Community Household Panel, the author analyses the determinants of long-term poverty and the processes underlying poverty transitions. At the individual level, labour market participation and human capital turn out to be important determinants. However, even in the long run most redistribution results from social protection transfers. The book demonstrates that social protection, far from being just a financial burden to the economy, can be seen as a productive factor. The findings endorse active policies aimed at human capital formation as a way to meet Europe's future economic and social challenges. Providing an economic framework in which to understand the productive effects of social protection, this book will be invaluable to researchers, academics and students with an interest in economics, sociology and political science. Its analysis of the performance of national and European policies will also ensure the book's appeal to governmental institutions and policymakers.