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Economics for Social Workers

Economics for Social Workers: The Application of Economic Theory to Social Policy and the Human Services

Michael Anthony Lewis
Karl Widerquist
Copyright Date: 2001
Pages: 246
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  • Book Info
    Economics for Social Workers
    Book Description:

    This primer for social work students introduces the general definitions and concepts of economics and uses case studies in social work to develop applied knowledge. The case studies include stories of job training, substance abuse centers, counseling, therapy, child protective services, and services for the poor. The concluding chapters are devoted to topics directly related to social work: economics of poverty, health economics, household economics, the economics of labor, and government failure.

    eISBN: 978-0-231-50555-0
    Subjects: Sociology, Economics, Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Acknowledgments
    (pp. ix-xii)
  4. Chapter One The Economic Perspective
    (pp. 1-14)

    Economics is one of the five main branches of social science, along with sociology, political science, cultural anthropology, and psychology. Social work is considered an applied profession rather than a social science. Social workers are probably more familiar with some of the other branches of social science than with economics, and it might be best to explain the novel by way of the familiar.

    All social sciences study aspects of human behavior. One thing humans do is interact with one another to form social systems such as families, groups, organizations, communities, and nation-states. Sociology is the study of social systems....

  5. Chapter Two Marginal Analysis
    (pp. 15-24)

    Most economists working today are part of the neoclassical school of thought. Other schools of thought in economics include post-Keynesian, institutionalist, Austrian, and Marxist economics. This book focuses on neoclassical economics because it is the mainstream methodology. Other schools will appear in this book as critics of mainstream methods.

    Neoclassical economists have used a mathematical approach to modeling human behavior for more than one hundred years. This methodology has often baffled and sometimes enraged critics, but it is as popular now as it has ever been, and a good understanding of it is essential to understanding economics. This methodology allows...

  6. Chapter Three Perfect Competition and the Supply-and-Demand Model
    (pp. 25-48)

    In economic theory a market is a place where buyers and sellers come together to make exchanges. The boundaries of a market depend on the good in question. For two sellers to be considered part of the same market, they must be close enough so consumers could reasonably view the two as substitutes. For example, the corner supermarket is not a market in the economic sense. The local market for groceries consists of all the grocery transactions in a neighborhood, but it would not include a store across town if consumers believed it was too far away from them to...

  7. Chapter Four Imperfect Competition
    (pp. 49-64)

    As anyone who has ever dealt with a used car salesperson, tried to figure out which social worker or doctor to go to, or has lived in a company town knows, most markets are far from perfect. So what happens when the four assumptions of perfect competition—many buyers and sellers, an undifferentiated product, perfect information, and free entry and exit—are relaxed?

    On the basis of differing assumptions, economists identify four other types of market structure: monopoly, monopsony, monopolistic competition, and oligopoly. None leads to all the desirable outcomes of perfect competition (the conditions of perfect competition do not...

  8. Chapter Five Market Failure and Government Intervention
    (pp. 65-74)

    Conservatives certainly disagree, but theoretical justification exists for government intervention in markets. Still, readers of all political stripes may well wonder: Isn’t a government decision justified so long as it is made democratically? At least two arguments—one based on the principle of liberty and the other on the principle of efficiency—commonly are offered for why the government should not intervene in the economy unless it has a compelling reason to do so.

    The liberty argument against government intervention is that people have a right to exchange their legally owned property for whatever they see fit. A government restriction...

  9. Chapter Six Cost-Benefit and Cost-Effectiveness Analysis
    (pp. 75-88)

    To be worth doing, any government action justified by market failure must prove to be a Pareto improvement. Cost-benefit analysis (using the rule for optimal decision making from chapter 2) is one method used to assess whether a government program results in a Pareto improvement.

    The second broad justification for government intervention in the marketplace, to change the distribution of property, does not rely on the concept of market failure and does not require that programs result in Pareto improvement. Cost-benefit analysis also can be useful for assessing programs using the distributional justification, but the costs and benefits must be...

  10. Chapter Seven Government Failure
    (pp. 89-98)

    Like market failures, government failures are possible. Although the discussion thus far has assumed that government is a benign entity that would act to rectify market failures, economists since Adam Smith have pointed out that there is no certainty that a government, even a democratic one, will choose the efficient policy responses to market failures, even if economists could identify efficient policies.¹

    Beginning in the 1950s and 1960s, a group of economists, who have come to be called public choice theorists, began to address government failures by using mainstream economic tools.² More specifically, their method was to apply to political...

  11. Chapter Eight The Economics of Labor
    (pp. 99-120)

    Social workers are acutely aware of the social problems associated with unemployment and low-wage labor, such as domestic violence, low self-esteem, depression, and suicide, and therefore many social workers are interested in proposing various types of policies to address these problems. Policymakers will take such proposals more seriously if those who make them exhibit an understanding of the economic implications of their prescriptions. In this chapter we explore a simple model of an individual’s work decision and how this model relates to a supply-and-demand model of the labor market. We also discuss criticism of the supply-and-demand model and the problems...

  12. Chapter Nine The Economics of Poverty
    (pp. 121-142)

    In August 1996 President Bill Clinton signed into law a welfare reform plan that ended sixty years of social welfare policy. Since the passage of the Social Security Act of 1935, impoverished single parents with young children had had a statutory right to government assistance. The 1996 reforms turned welfare over to the states, removed the guarantee of assistance, stressed work instead of income assistance, and placed on recipients of welfare a lifetime eligibility limit of five years. Under this new system needy single parents with young children can simply be turned away if they appeal to the government for...

  13. Chapter Ten The Economics of Health Care
    (pp. 143-156)

    The extensive involvement of social workers in health care has led schools of social work to require students to take courses that address health policy issues. But these courses typically contain little about the contribution that economic theory can make to our understanding of health-care policies. This chapter is an attempt to rectify this shortcoming by discussing efficiency- and equity-based government interventions in the health-care market and some ideas about how economic theory might help address the ethical issues surrounding organ transplantation.

    Recall from earlier chapters that certain conditions, including perfect information, must hold for perfect competition to exist and...

  14. Chapter Eleven Economic Demography
    (pp. 157-166)

    How do people decide how many children they will have? Do welfare payments encourage poor women to have more children? Is the family declining—and what is a family, anyway? Why do people get married—or divorced? Why do people move? Do the states’ levels of welfare payment play a role in the decision to move? Are economic development packages a good deal for the taxpayer? How can we save the Social Security program as the baby boomers begin to retire?

    These may seem like strange questions for the science that studies buying and selling, but economists have found ways...

  15. Glossary
    (pp. 167-172)
  16. Notes
    (pp. 173-182)
  17. Index
    (pp. 183-188)