Over the past two decades the welfare state has been under increasing pressure. Rapid social and economic change has left many people dependent on social institutions, while deteriorating economic prospects have led to calls to cut welfare expenditure. This book introduces key concepts in the welfare state debate and questions the arguments for further cutbacks. It examines: - the role, nature and effects of the welfare state in contemporary society - the links between the welfare state and the economy, particularly in Australia in the 1990s - the success of the Australian welfare state in achieving its aims of improving economic equality and social cohesion. These issues are considered in the light of the experiences of comparable countries able to offer lessons to Australia. Written by economists in clear language, the book makes an important contribution to discussion of social issues.