Mandatory pensions are a worldwide phenomenon. However, with fixed contribution rates, monthly benefits, and retirement ages, pension systems are not consistent with three long-run trends: declining mortality, declining fertility, and earlier retirement. Many systems need reform. This book gives an extensive nontechnical explanation of the economics of pension design. The theoretical arguments have three elements:
* Pension systems have multiple objectives--consumption smoothing, insurance, poverty relief, and redistribution. Good policy needs to bear them all in mind.
* Good analysis should be framed in a second-best context-- simple economic models are a bad guide to policy design in a world with imperfect information and decision-making, incomplete markets and taxation.
* Any choice of pension system has risk-sharing and distributional consequences, which the book recognizes explicitly.
Barr and Diamond's analysis includes labor markets, capital markets, risk sharing, and gender and family, with comparison of PAYG and funded systems, recognizing that the suitable level of funding differs by country.
Alongside the economic principles of good design, policy must also take account of a country's capacity to implement the system. Thus the theoretical analysis is complemented by discussion of implementation, and of experiences, both good and bad, in many countries, with particular attention to Chile and China.

This book is about economics and its application to the welfare state. Its core argument is that the welfare state exists for reasons additional to poverty relief, reasons arising out of pervasive problems of imperfect information, risk, and uncertainty. Barr focuses on the efficiency argument, indicating that the welfare state is here to stay, and discusses the ways in which it can and will adapt to economic and social change.

Higher education matters. No longer the exclusive province of a small intellectual elite, it is a key element in national economic performance. A modern economy needs a high-quality university system, and needs to make it accessible to everyone who can benefit. But mass higher education is expensive, and competes for public funds with pensions and health care, to say nothing of nursery education and schools. How to pay for higher education has thus become a central issue.
This book tells the story of the UK debate, illustrating a head-on collision between the economic imperatives of student loans and regulated market forces and the political imperative of "free" higher education. It also tells the story of the partnership of an economist and a political professional. The first part of the book contains selected writing from the late 1980s about two key elements in the puzzle: the proper design of student loans (writing which was picked up and promptly implemented in other countries), and the roleof regulated market forces, an area which remains a political minefield in most countries. The book traces those twin elements through the 1990s and into the 2000s, culminating in important - and perhaps path-breaking - legislation in 2004. Both sets of policies are rooted in the economics of information, and thus have technical roots not ideological ones. The only ideological element (a major preoccupation of both authors) is to widen access to higher education.
The book offers lessons both about policy design and about the politics of reform of particular relevance to countries which have not yet addressed the issue, including many OECD countries, the more advanced post-communistreforming countries and, increasingly to middle-income developing countries. More generally, the policies are suitable for any country which has the administrative capacity to collect income tax.

Higher education matters. No longer the exclusive province of a small intellectual elite, it is a key element in national economic performance. A modern economy needs a high-quality university system, and needs to make it accessible to everyone who can benefit. But mass higher education is expensive, and competes for public funds with pensions and health care, to say nothing of nursery education and schools. How to pay for higher education has thus become a central issue.
This book tells the story of the UK debate, illustrating a head-on collision between the economic imperatives of student loans and regulated market forces and the political imperative of "free" higher education. It also tells the story of the partnership of an economist and a political professional. The first part of the book contains selected writing from the late 1980s about two key elements in the puzzle: the proper design of student loans (writing which was picked up and promptly implemented in other countries), and the roleof regulated market forces, an area which remains a political minefield in most countries. The book traces those twin elements through the 1990s and into the 2000s, culminating in important - and perhaps path-breaking - legislation in 2004. Both sets of policies are rooted in the economics of information, and thus have technical roots not ideological ones. The only ideological element (a major preoccupation of both authors) is to widen access to higher education.
The book offers lessons both about policy design and about the politics of reform of particular relevance to countries which have not yet addressed the issue, including many OECD countries, the more advanced post-communistreforming countries and, increasingly to middle-income developing countries. More generally, the policies are suitable for any country which has the administrative capacity to collect income tax.

This is an abridgement of Barr and Diamond's 'Reforming Pensions: Principles and Policy Choices' (OUP, 2008), a larger book that is intended for policy makers and as a supplement in college courses. The problem. Mandatory pension systems are a worldwide phenomenon. However, with given contribution rates, monthly benefits and retirement ages, pension systems are not consistent with three long-run trends - declining mortality, declining fertility, and earlier retirement. Thus many systems need reform. Principles. This book gives an extensive but nontechnical explanation of the economics of pension design. The theoretical arguments have three elements. 1. Pension systems have multiple objectives - consumption smoothing, insurance, poverty relief, and redistribution. Good policy needs to bear them all in mind. 2. Good analysis should be framed in a second-best context - simple economic models are a bad guide to policy design in a world with imperfect information and decision-making, incomplete markets and taxation. 3. Any choice of pension system has distributional consequences, which the book recognizes explicitly. The analysis includes discussion of labor markets, capital markets, risk sharing and gender and family, with comparison of PAYG and funded systems, recognizing that the suitable level of funding differs by country. Alongside the economic principles of good design, policy must also take account of a country's capacity to implement the system. Thus the theoretical analysis is complemented by discussion of implementation, and of experiences, both good and bad, in many countries, with particular attention to China and Chile. Policy conclusions: 1. Sound application of the principles outlined above can and does lead to widely different systems in different country settings. 2. Unless there are transfers from outside the system, any improvement to the finances of a pension system must involve one or more of (a) higher contribution rates, (b) lower monthly pensions, (c) later retirement at the same monthly pension, (d) policies designed to increase national output. 3.The previous statement holds whatever the degree of funding. If a public pension is regarded as unsustainable the problem needs to be addressed directly by one of these methods.

This study recommends employing "human capital contracts" wherein students agree to pay a percentage of their income over time in exchange for funds to finance their education. The main difference between "human capital contracts" and loans is the variable value of the payments students make during the repayment period. Their financial consequences, of risk transfer from students to investors and increased information regarding future graduates' earnings, make the contracts an attractive alternative in funding higher education.

The sixth edition of this successful textbook discusses elements of the welfare system, including cash benefits, the health service and education. The text argues that the welfare state does not exist just to help the underprivileged, but also offers efficiencies 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 places the content within a theoretical framework, and uses learning features to engage students with the discussion. Each chapter is concluded with a summary of the key points and an appendix, which provides a non-technical summary for students with no previous exposure to economics. Worked examples from around the world facilitate the comparison of global welfare issues, while diagrams allow readers to visualize concepts. The author ends each chapter with 'questions for further discussion' which could be prepared to structure seminars or to independently test understanding, while an annotated list of further reading suggestions guides additional research. This book is accompanied by the following online resources. For students: - Web links - Further reading For lecturers: - PowerPoint slides

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.
Online Resource Centre
For students:
- Web links
- Further reading
- Links to related Oxford Scholarship Online titles
For lecturers:
- PowerPoint slides - these have been expanded for the fifth edition

Most higher education finance literature assumes that students cannot pledge their future earnings to finance their education in a free society. Investing in Human Capital, first published in 2004, challenges that assumption and explores human capital contracts as an alternative mechanism for financing higher education. Investing in Human Capital tracks the roots of the idea behind human capital contracts, discusses the beneficial consequences they would have on students and on higher education markets, and describes how they can develop in light of the innovations that have taken place in financial markets during the last decades. The book also explores the challenges - ethical and financial - that such instruments face and offers implementation alternatives that can bring about their existence in the context of a national higher education financing programme.