Bismarck versus Beveridge: a comparison of social security systems in Europe

In a European comparison of the financing systems for social security, considerable differences between countries exist. But the systems can be broadly classified, and in Europe two basic systems can be distinguished. The Bismarck system, which is based primarily on social insurance contributions, and the tax-based Beveridge system. In the Bismarck system no redistribution between different earnings groups results while this is the case in the Beveridge system. In Europe there is an evident trend that the two systems are converging.