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CORDIS

Designing the 21st Century Welfare State

Objective

This proposal aims to measure, using a combination of novel economic theory and empirical evidence, how
advanced economies treat their most vulnerable members, determine whether existing welfare programs are
cost-effective, identify room for policy improvements, and ultimately, provide a scientific basis for
evaluating the costs and benefits of the welfare state. Formally, the project develops a theoretical and
quantitative framework for designing and evaluating social insurance policies that protect households against
economic and other life-cycle risks, with particular emphasis on the trade-off between insurance provision or
redistribution towards the needy, and incentives to actively participate in economic activity through labour
supply, consumption and savings decisions.
On the theoretical side, the project develops new methods for analysing and solving an almost unrestricted
class of dynamic mechanism design or social insurance problems, to provide sharp characterizations of
optimal policies that can be tightly connected to empirical evidence. On the empirical side, the project
leverages a rich novel data set of very low-income households in France to understand the determinants and
dynamics of extreme poverty and assess the effectiveness of existing welfare policies. Combining models
with evidence allows us to assess formally the costs and benefits of existing welfare programs, such as social
housing, food stamps, universal health care, child benefits, subsistence income transfers or major social
insurance programs.

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Programme(s)

Topic(s)

Funding Scheme

HORIZON-ERC - HORIZON ERC Grants

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Call for proposal

(opens in new window) ERC-2025-ADG

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Host institution

FONDATION JEAN JACQUES LAFFONT,TOULOUSE SCIENCES ECONOMIQUES
Net EU contribution
€ 1 778 750,00
Address
5E ETAGE, 1 ESP DE L'UNIVERSITE
31080 Toulouse
France
Region
Occitanie Midi-Pyrénées Haute-Garonne
Activity type
Research Organisations
Links
Total cost
No data

Beneficiaries (2)