Social Inequality in History (Stratification and Classes)
only in the West. Second, inequality has often taken
the form of a hierarchical order, or ‘stratification,’ of
distinct groups according to their access to power,
their rights, and material well-being. Moreover, the
hierarchical mode of social differentiation is a wide-
spread mark of the less advanced, less technologically
and culturally complex societies in which historians
are often especially interested. Third, it is hard not to
acknowledge the success, and the astonishing flexi-
bility, of the concept of ‘class’ for describing systems
of inequality. As new and intellectually promising
approaches have been developed since around 1980
that link ‘culture’ with ‘class,’ and as these approaches
are now applied in empirical research, there can be
little doubt about the fact that the history of inequality,
stratification, and class will retain a prominent place in
the field of social and cultural history.
See also: Class: Social; Equality and Inequality: Legal
Aspects; Inequality; Inequality: Comparative Aspects;
Marx, Karl (1818–89); Mobility: Social; Social Strati-
fication; Weber, Max (1864–1920)
Bibliography
Barber B, Lipset S M, Hodge R W, Siegel P M, Stinchcombe
A L, Rodman H 1968 Stratification, Social. In: Sills D (ed.)
International Encyclopedia of the Social Sciences. Macmillan
and Free Press, New York, Vol. 15
Beck U 1986 Risikogesellschaft. Auf dem Weg in eine andere
Moderne. Suhrkamp, Frankfurt, Germany
Bendix R, Lipset S M (eds.) 1953 Class Status, and Power: Social
Stratification in Comparati
e Perspecti
e. Free Press, New
York
Blumin S M 1989 The Emergence of the Middle Class. Social
Experience in the American City, 1760–1900. Cambridge
University Press, New York
Bourdieu P 1979 La distinction. Critique sociale du jugement.
Editions de Minuit, Paris
Canning K 1992 Gender and the Politics of Class Formation:
Rethinking German Labor History. American Historical
Re
iew 97: 736–68
Cohen L 1990 Making a New Deal: Industrial Workers in
Chicago, 1919–1939. Cambridge University Press, Cambridge,
UK
Corfield P J (ed.) 1991 Language, History, and Class. Blackwell,
Oxford
Dahrendorf R 1959 Class and Class Conflict in Industrial Society.
Stanford University Press, Stanford, CA
Duby G 1978 Les Trois Ordres ou l’Imaginaire du FeT odalisme.
Gallimard, Paris
Giddens A 1973 The Class Structure of the Ad
anced Societies.
Hutchinson, London
Hradil S 1987 Sozialstrukturanalyse in einer fortgeschrittenen
Gesellschaft. Von Klassen und Schichten zu Lagen und Milieus.
Leske und Budrich, Opladen, Germany
Joyce P 1991 Visions of the People: Industrial England and the
Question of Class 1848–1914. Cambridge University Press,
Cambridge, UK
14320
Kocka J 1975 Theorien in der Sozial- und Gesellschafts-
geschichte. Vorschla$ ge zur historischen Schichtungsanalyse.
Geschichte und Gesellschaft 1: 9–42
Kocka J 1980 The Study of Social Mobility and the Formation
of the Working Class in the 19th Century. Le Mou
ement
Social 111: 97–117
Kocka J 1987 Lohnarbeit und Klassenbildung. Arbeiter und
Arbeiterbewegung in Deutschland 1800–1875. J H W Dietz,
Berlin, Germany
Lenski G E 1966 Power and Pri
ilege: A Theory of Social
Stratificaton. McGraw Hill, New York
Levine B et al. American Social History Project 1989–92 Who
Built America? Working People and the Nation’s Economy,
Politics, Culture, and Society. 2 Vols. Pantheon, New York
Nolte P 2000 Die Ordnung der deutschen Gesellschaft: Selbstent-
wurf und Selbstbeschreibung im 20. Jahrhundert. Beck,
Munich, Germany
Scott J W 1986 Gender: A Useful Category of Historical
Analysis. American Historical Re
iew 91: 1053–5
Stedman Jones G 1983 Languages of Class: Studies in English
Working Class History, 1832–1982. Cambridge University
Press, Cambridge, UK
Thernstrom S 1964 Po
erty and Progress: Social Mobility in a
Nineteenth Century City. Harvard University Press, Cam-
bridge, MA
Thompson E P 1963 The Making of the English Working Class.
Penguin, Harmondsworth, UK
Wahrman D 1995 Imagining the Middle Class. The Political
Representation of Class in Britain, 1780–1840. Cambridge
University Press, Cambridge, UK
Weber M 1978 Economy and Society. An Outline of Interpreti
e
Sociology. In: Roth G (ed.) 2 Vols. University of California
Press, Berkeley, CA
Wehler H-U 1987–95 Deutsche Gesellschaftsgeschichte, 3 Vols.
C H Beck, Munich, Germany
Zunz O 1990 Making America Corporate 1870–1920. University
of Chicago Press, Chicago
P. Nolte
Social Influence, Psychology of
Social influence refers to the ways people alter the
attitudes or behavior of others. Typically social
influence results from a specific action, command, or
request, but people also alter their attitudes and
behaviors in response to what they perceive others
might do or think. Social psychologists often divide
social influence phenomena into three categories—
conformity, compliance, and obedience—although the
distinction between the categories is often difficult to
discern. Conformity generally refers to changes in
opinion or behavior to match the perceived group
norm. These changes are voluntary, although the
individual may not always be aware that he or she is
conforming. Compliance refers to changes in behavior
that are elicited by a direct request. These requests

usually call upon the individual to buy a product, do a
favor, or donate money or services. Obedience refers to
responses to direct commands or demands from an
authority figure. Although individuals are not
physically coerced into these responses, they often feel
as if they have little choice but to obey the command.
1. Conformity
People exhibit conformity when they change their
attitudes or behavior to resemble what they believe
most people like them would think or do. Everyday
examples of conformity include selecting clothes to
match what other people are wearing and recycling
newspapers because it appears that most people
support recycling. Psychologists have identified two
primary motives to explain conformity behavior—
informational influence and normati
e influence
(Deutsch and Gerard 1955). When informational
influence is operating, individuals conform because
they want to be accurate. People agree with the
perceived norm because they lack confidence in their
own judgment and assume that the typical judgment is
correct. When conformity reflects normative influence,
the individual’s primary concern is to gain social
approval and to avoid the consequences of appearing
deviant. People go along with the perceived norm
because they hope their conformity will lead to
acceptance from the group or because they hope to
avoid the criticism, ridicule, and possible rejection that
may follow a failure to conform. In practice, infor-
mational influence and normative influence often
operate hand in hand. For example, a conforming
individual may hope to gain acceptance from a group
and may also believe that the majority of group
members are correct in their judgment.
The first demonstration of information influence in
a conformity study was reported by Muzafir Sherif
(1936). This classic investigation placed male part-
icipants in a totally darkened room. Periodically a
small dot of light appeared on a wall approximately 15
feet away, and the participants’ task was to report how
much, if any, they saw the light move. In fact, the light
did not move. Sherif took advantage of a perceptual
illusion known as the autokinetic effect—the tendency
to see a stationary point of light move in a dark
environment. When three participants sat together
and reported their perceived movement aloud, Sherif
found that over time the estimates each participant
gave tended to resemble those of the others in the
room. In other words, each group established its own
norm for the amount of movement they perceived, and
the group members tended to see an amount of
movement close to that norm. These participants
typically were unaware that they had been influenced
by the group, and later investigations found partici-
pants continued to rely on the group norm even after
the other individuals were no longer in the room.
Social Influence, Psychology of
A second set of early conformity studies demons-
trated the power of normative influence. Solomon
Asch (1951) asked participants to engage in a simple
line judgment task. In the standard procedure, several
individuals at a time were presented with a picture of
a ‘standard’ line accompanied by three comparison
lines. The task was to identify which of the comparison
lines was the same length as the standard line. The
individuals gave their responses aloud for the ex-
perimenter to record. Because the length of the lines
differed by noticeable amounts, the task was an easy
one. However, only one of the individuals in the study
was a real participant. The others were confederates
who, beginning with the third line judgment task,
began to give wrong answers (before the real
participant’s turn to respond). On 12 of the remaining
16 trails, the real participant heard each of the others
select a comparison line that clearly was incorrect. The
question was whether the participants would give
what they knew to be the correct answer, or if they
would go along with the response given by the
group.Typically, participants went along with what
their senses told them. However, on 37 percent of the
trials the participants conformed to the norm and gave
the same response as the rest of the group. Moreover,
approximately three-quarters of the participants went
along with the majority at least once.
Most of the conforming participants in Asch’s
studies were motivated by normative influence. That
is, these individuals were concerned about how they
would look in the eyes of the other participants if they
were to express their true judgments. When partici-
pants in one study were allowed to give their responses
in private, the rate of conformity dropped dramatically
(Asch 1956). However, at least some informational
influence also appeared to be operating in the Asch
studies. That is, some people came to believe that the
shared perception of the group must be more accurate
than their own visual perception.
1.1 Variables Affecting Conformity
Although numerous replications of Asch’s findings
provide persuasive evidence for the power of con-
formity, not all people conform to the same degree in
the same situation. For example, cultural variables
have been found to play a role in the conformity
process. Bond and Smith (1996) reviewed 133 studies
using the Asch procedure conducted in 17 countries.
They found participants from collectivist cultures (see
Cultural Psychology) were more likely to conform to
the group norm than people from individualistic
cultures. These investigators also found a trend toward
less conformity since the 1950s in studies with US
participants. Thus, changes in societal standards, such
as the value placed on independence and autonomy,
may affect the extent to which members of a given
culture conform. Age also appears to play a role in this
14321
Social Influence, Psychology of
process. Consistent with conventional wisdom, re-
searchers find that young adolescents are particularly
prone to conforming with the behavior of peers.
Finally, several investigations find that personality
plays a role in conformity. People who have a high
need to feel in control are less likely to conform,
whereas those who are highly concerned with the
impression they make on others are more likely to go
along with the perceived norm.
Psychologists have not always agreed on the extent
to which gender influences conformity behavior
(Cooper 1979, Eagly and Chravala 1986). Although
some disagreement remains about the size of the effect,
it does appear that women are more likely to conform
than men. Moreover, this tendency to conform seems
to be especially likely in face-to-face situations like the
Asch procedure. Explanations for this difference
include men’s need to appear independent and
women’s tendency to promote smooth social inter-
actions.
Finally, the number of other people in the situation
affects conformity behavior. Asch (1956) varied the
number of confederates in his procedure, creating
conditions with one to fifteen confederates. He found
that conformity increased noticeably as the number of
confederates grew, but that this effect leveled off after
three or four. In other words, five or fifteen con-
federates giving an incorrect response to the line
judgment task generated no more tendency to conform
to the norm than four confederates. Other researchers
have developed elaborate models to account for the
effects of crowd size on conformity (Latane 1981,
Tanford and Penrod 1984). These models consider
such variables as characteristics of the individuals in
the group and physical proximity of the group
members.
1.2 Percei
ed Norms
The impact of norms is not limited to situations like
the Asch paradigm, in which people observe the
behavior of others and face immediate social con-
sequences. Rather, many daily decisions are influenced
by what individuals believe to be the normative
behavior for a given situation. Whether people give
money to a charitable cause, yield the right of way to
pedestrians, or take an extra copy of the paper from a
newspaper box depends to some degree on what they
perceive to be the normative behavior in that situation.
Researchers have identified two kinds of perceived
norms (Cialdini et al. 1991). Injuncti
e norms refer to
correct behavior, that is, what society says one should
do in the situation. Injunctive norms tell people they
should give to charitable causes and that they should
not take a newspaper they have not paid for.
Descripti
e norms refer to what most people actually
would do in the situation. Although people typically
14322
do not have adequate data to make an accurate
assessment of what most people would do, they
commonly rely on whatever information they have to
estimate the descriptive norm, however incorrect they
may be.
Injunctive and descriptive norms often are very
similar and lead us to the same decision about our
behavior. However, psychologists also point to some
notable exceptions. For example, a widely accepted
injunctive norm states that people should not litter in
public settings. But a parking garage filled with bits of
litter suggests to passersby that the descriptive norm—
what people actually do—is quite different. Whether
people respond to the injunctive or descriptive norm in
this situation may depend on which of these two is
brought to their awareness. Researchers in one set of
studies placed useless flyers on windshields in a parking
garage (Reno et al. 1993). When the drivers’ attention
was drawn to the litter that others had apparently
tossed to the ground (descriptive norm), they tended
to also drop the flyer on the ground. When these
drivers were made aware of the injunctive norm, such
as when they saw another person pick up a piece of
litter to keep the environment clean, most decided
against littering.
2. Compliance
People demonstrate compliance when they agree to an
explicit request, such as a request to buy a product or
to volunteer their time. Much of the research on
compliance has examined the effectiveness of
sequential-request procedures. By presenting partici-
pants with certain kinds of request in specific
sequences, investigators have identified many of the
psychological processes that lead people to accept or
refuse a request. Four of these procedures are de-
scribed here.
The most widely researched of the sequential-
requests procedures is the foot-in-the-door technique
(Freedman and Fraser 1966). The procedure begins
with a small request that virtually everyone agrees to.
At some later point, the same requester or a different
individual returns and presents a larger request. This
second request is known as the target request, because
getting participants to agree with the larger request is
the real purpose of the procedure. If the foot-in-the-
door manipulation is successful, participants will
comply with the target request at a higher rate than if
they had been presented only with the target request.
Numerous investigations demonstrate that the foot-
in-the-door procedure can increase compliance to the
request. However, reviews of this literature find that
many studies fail to produce the effect and that the
overall size of the effect is not large (Burger 1999). Part
of the problem with this research is that investigators
have used a variety of procedures to create a foot-in-

the-door manipulation, some of which are not effec-
tive. For example, the foot-in-the-door procedure is
more likely to increase compliance when participants
are allowed to perform the initial request, when the
initial request requires more than a minimal amount of
effort, and when the second request appears to be a
continuation of the initial request (Burger 1999).
Researchers disagree on the psychological processes
underlying the foot-in-the-door phenomenon. The
most widely cited interpretation for the effect is the
self-perception explanation. According to this ac-
count, agreeing with the initial request causes people
to alter the way they think about themselves. When
later presented with the target request, these indiv-
iduals are said to use their compliance to the small
request as an indicator of their attitude toward such
causes or toward participating in these kinds of
activities. Because they agreed to the small request,
they are more likely than control participants to agree
to the target request.
Another common sequential-request procedure
begins with an initial request so large that most people
refuse. These individuals then are presented immedi-
ately with a smaller (target) request. If this door-in-the-
face technique is successful, participants will agree to
the target request more often than if they had not first
rejected the large request (Cialdini et al. 1975). For
example, participants in one study were asked to
volunteer for a two-year placement working as a youth
counselor. After they refused, experimenters asked
participants if they would chaperone some children on
a two-hour trip to the zoo. These participants agreed
at a higher rate than those asked only the target
request (Cialdini et al. 1975).
The door-in-the-face procedure is said to be effective
because the requester takes advantage of a widely
practiced social rule called the reciprocity norm. The
reciprocity norm governs many social exchanges and
requires that people return favors and acts of kindness
(Gouldner 1960). Most people feel a strong sense of
obligation to someone who has done them a favor,
even when that favor was not requested. Moreover,
studies find that people often give back more than they
received in order to relieve themselves of their ob-
ligation. When applied to the door-in-the-face situ-
ation, the requester ‘gives’ the individual what appears
to be a concession. That is, the requester seems to give
up something he or she wants, and the individual
reciprocates by giving something to the requester, i.e.,
the target request.
Another sequential-request procedure begins when
the participant agrees to a request at a given price.
Requesters using the low-ball procedure then raise the
cost of the request slightly. The procedure leads to
more compliance at the higher price than when the
price is presented at the outset (Cialdini et al. 1978).
For example, undergraduates in one study agreed to
participate in a psychology experiment. The students
then were informed that the experiment was to be held
Social Influence, Psychology of
at 7.00 a.m., thus making participation more costly
than they probably had imagined. Nonetheless, these
students showed up for the early morning experiment
more often than those told about the time of the
experiment at the beginning (Cialdini et al. 1978). The
effectiveness of the low-ball procedure is said to result
from a sense of commitment that develops when the
individual agrees to the initial request. The individuals
feel committed to perform the agreed-upon behavior,
or at least to do something for the requester (Burger
and Petty 1981). This sense of commitment causes
people to continue to agree to the request even at the
higher price.
In contrast to the small-to-large price progression
used in the low-ball technique, the that’s-not-all
procedure uses a large-to-small price progression.
Requesters using this procedure present the request at
a given price, then improve the deal before the
individual can respond (Burger 1986). For example,
participants in one study were told the price of a
cupcake was one dollar. Before participants could
respond, the salesperson said the price really was 75
cents. The participants in this condition were more
likely to buy the cupcake than those told at the outset
that the price was 75 cents (Burger 1986). The that’s-
not-all procedure is said to work in part because, as in
the door-in-the-face procedure, the requester appears
to be making a concession. The procedure also is
effective because it appears to alter the ‘anchor point’
the individual uses to decide if the final price is a good
or fair one. That is, participants are said to use the
initial price as a reference point when deciding whether
to agree with the final price. Because the final price is
lower, participants are more likely to see it as reason-
able than when they are presented only with the lower
price.
3. Obedience
Obedience refers to an individual’s response to a
command from an authority figure. Implicit in this
description is the notion that the recipient of the
command is reluctant to engage in the behavior and
probably would not unless give direct orders to do so.
Consequently, psychologists’ ability to conduct con-
trolled laboratory studies of obedience has been
limited by concerns for the welfare of participants who
are torn between obeying commands and following
their conscience. As a result of heightened concerns for
the ethical treatment of human participants in recent
years, most of the insights psychologist have about the
obedience process come from a series of demonstra-
tions conducted in the 1960s by Stanley Milgram
(1974).
The basic procedure in Milgram’s studies used one
real participant, one confederate posing as a par-
ticipant, and an experimenter. The study was described
to participants as a learning experiment designed to
14323
Social Influence, Psychology of
test the effects of punishment. The participant’s task
was to teach a list of word associations to the
confederate by punishing the confederate for incorrect
answers. The method of punishment was electric
shock, with the participant instructed to give in-
creasingly severe shocks to the confederate for each
wrong answer. The participant’s dilemma occurred
when the confederate complained about the shocks
and demanded to be released from the shock ap-
paratus. In most versions of the procedure the par-
ticipant could hear the confederate screaming in pain
through the wall that separated them. Although it was
apparent that the confederate was suffering and was
probably receiving dangerous levels of electric shock,
the experimenter commanded the participant to con-
tinue giving shocks. The procedure continued until the
participant refused to go on, or until the participant
pressed the highest button on the apparatus (labeled
450 volt) three times, for a total of 33 shocks.
The results of the study were unexpected. Prior to
conducting the investigation, Milgram asked students,
middle-class adults, and psychiatrists to predict the
results. Everyone agreed that the typical participant
would stop very early in the shock sequence and that
virtually no one would continue to the 450 volt level.
However, in the basic procedure Milgram found that
65 percent of the participants continued to follow the
experimenter’s commands all the way to the end.
Milgram (1974) conducted a series of variations on
the basic procedure in an effort to explain the
participants’ high level of obedience. He found that
proximity of the participant and confederate appeared
to play a role. Obedience dropped to 40 percent when
the participant was in the same room as the confed-
erate, and dropped to 30 percent when the participant
was required to touch the confederate to administer
the shock. Although the original studies were con-
ducted with male participants, a similar pattern was
found when Milgram used women as participants. The
level of obedience did not diminish when the ex-
perimenter gave his commands in a meek manner, but
dropped to 20 percent when the commands were given
by another confederate posing as a participant.
Milgram concluded from this last finding that
obedience does not depend on the authority figure’s
personality or charismatic style, but rather that
obedience requires only that the individual be recog-
nized as a legitimate authority.
Most social psychologists point to Milgram’s re-
search as an example of the often-unrecognized power
of the situation to influence behavior. Although
personality characteristics of the participants can
affect whether they obey or refuse the command (Blass
1991), the discrepancy between people’s predictions
and the actual outcome of the Milgram studies
suggests that the situation had a greater influence than
most people recognize. Other psychologists point out
that Milgram’s procedure also took advantage of
conformity and compliance processes. For example,
14324
by moving from small to progressively larger shocks,
Milgram placed participants in a situation similar to
that used in foot-in-the-door demonstrations. Mil-
gram also found a drop in obedience when participants
had information about descriptive norms. When
participants saw two other participants (actually
confederates) refuse the command, only 10 percent
obeyed the experimenter’s commands to the end.
4. Future Directions
Although researchers have identified many social
influence phenomena, questions remain about the
psychological processes underlying some of these
behaviors. Future research is likely to examine these
processes, with particular attention to the way multiple
processes combine to produce conformity and com-
pliance. Investigators also may focus on variables
affecting social influence. In particular, cultural dif-
ferences in conformity and compliance behavior are
likely to be explored. However, future research on
obedience probably will be limited by concerns for the
ethical treatment of human participants. For many
years now, these concerns have prevented researchers
from replicating the procedures used by Milgram in
his obedience studies. The challenge for investigators
is to develop procedures that create a realistic
obedience situation without exposing participants to
excessive emotional stress.
See also: Compliance and Obedience: Legal; Confor-
mity: Sociological Aspects; Experimental Design:
Compliance; Impression Management, Psychology of;
Obedience: Social Psychological Perspectives
Bibliography
Asch S E 1951 Effects of group pressure upon the modification
and distortion of judgments. In: Guetzkow H (ed.) Groups,
Leadership, and Men. Carnegie Press, Pittsburgh, PA
Asch S E 1956 Studies of independence and conformity: A
minority of one against a unanimous majority. Psychological
Monographs 70 (9): 416.
Blass T 1991 Understanding behavior in the Milgram obedience
experiment: The role of personality, situations, and their
interactions. Journal of Personality and Social Psychology 60:
398–413
Bond R, Smith P B 1996 Culture and conformity: A meta-
analysis of studies using Asch’s (1952b, 1956) line judgment
task. Psychological Bulletin 119: 111–37
Burger J M 1986 Increasing compliance by improving the deal:
The that’s-not-all technique. Journal of Personality and Social
Psychology 51: 277–83
Burger J M 1999 The foot-in-the-door compliance procedure: A
multiple-process analysis and review. Personality and Social
Psychology Re
iew 3: 303–25
Burger J M, Petty R E 1981 The low-ball compliance technique:
Task or person commitment? Journal of Personality and Social
Psychology 40: 492–500

Cialdini R B, Cacioppo J T, Bassett R, Miller J A 1978 The low-
ball procedure for producing compliance: Commitment then
cost. Journal of Personality and Social Psychology 36: 463–76
Cialdini R B, Kallgren C A, Reno R R 1991 A focus theory of
normative conduct: A theoretical refinement and reevaluation
of the role of norms in human behavior. Ad
ances in
Experimental Social Psychology 24: 201–34
Cialdini R B, Vincent J E, Lewis S K, Catalan J, Wheeler D,
Darby B L 1975 Reciprocal concessions procedure for in-
ducing compliance: The door-in-the-face technique. Journal of
Personality and Social Psychology 31: 206–15
Cooper H M 1979 Statistically combining independent studies:
A meta-analysis of sex differences in conformity research.
Journal of Personality and Social Psychology 37: 131–46
Deutsch M, Gerard H B 1955 A study of normative and
informational social influences upon individual judgment.
Journal of Abnormal and Social Psychology 51: 629–36
Eagly A H, Chravala C 1986 Sex differences in conformity:
Status and gender-role interpretation. Psychology of Women
Quarterly 10: 203–20
Freedman J L, Fraser S C 1966 Compliance without pressure:
The foot-in-the-door technique. Journal of Personality and
Social Psychology 4: 195–202
Gouldner A W 1960 The norm of reciprocity: A preliminary
statement. American Sociological Re
iew 25: 161–78
Latane B 1981 The psychology of social impact. American
Psychologist 36: 343–56
Milgram S 1974 Obedience to Authority. Harper, New York
Reno R R, Cialdini R B, Kallgren C A 1993 The transsituational
influence of social norms. Journal of Personality and Social
Psychology 64: 104–12
Sherif M 1936 The Psychology of Social Norms. Harper, New
York
Tanford S, Penrod S 1984 Social influence model: A formal
integration of research on majority and minority influence
processes. Psychological Bulletin 95: 189–225
J. M. Burger
Copyright # 2001 Elsevier Science Ltd.
All rights reserved.
Social Insurance: Legal Aspects
1. Social Insurance and Pri
ate Insurance
The notion of insurance is widespread and clear:
insurance is a way of providing for the consequences
of negative future events (risks or contingencies) in a
collective manner with a special technique of financing.
The distinction between private and social insurance is
less clear: social insurance is organized by public
authorities through legislation, and is usually com-
pulsory, while private insurance is usually voluntary.
Social insurance seeks to provide coverage against the
consequences of risks like sickness, industrial accident,
invalidity, old age, and unemployment for a large part
of the population of a nation. To attain these goals, a
compulsory form of insurance is considered a necess-
ity. Bismarck’s social insurance in Germany is in some
ways the prototype of social insurance. However, his
social insurance covered only workers rather than the
general population (Koehler and Zacher 1982).
International Encyclopedia of the Social & Behavioral Sciences
Social Insurance: Legal Aspects
The difference between social and private insurance
can be found in the goals, the techniques of protection,
the legal form of the insurance bodies as private or
public organizations, and the way of financing the
benefits. But there is no clear distinction between
them. Sometimes, the goals of social insurance are
attained by compulsory private insurance and, in
some countries, the bodies responsible for social
insurance are private bodies.
One of the main distinctions between social and
private insurance concerns the ways in which risk is
calculated and financed. In the field of private in-
surance, the basis of calculation of the premiums is the
risk. In the field of social insurance, the risk is less
important, and social aims (such as health and welfare)
prevail against the economic criterions.
Private insurance, moreover, distributes the burden
of an individual risk across a group. Social insurance
has the same effects, but it also effects income
redistribution between those who are healthy and sick,
richer and poorer, younger and older people, or
households without and with family members.
2. Two Characteristic Items of Social Insurance:
Financing and Organization
Thus, two characteristic items of social insurance
remain, which allow us to distinguish between social
insurance and other techniques of social protection.
Those interlinked items are the ways of financing
social insurance and the organization of social in-
surance.
2.1 Financing
Social insurance benefits were originally financed by
contributions levied on earnings and divided between
employee and employer, thus expressing the shared
responsibility between employer and employee with
regard to work-related social risks. State subsidies
completed the financing. However, this scheme
changed over time. Some countries introduced in-
creasing state subsidies, while others changed the
proportion of the contributions burden payable by
employer and employee. In Germany, for example, the
employees had to relinquish a public holiday to
compensate employers for the new financial burden
created by the introduction of long-term care in-
surance. Currently, there are ongoing discussions
about changing the financial basis from the earnings of
employees to the surplus value of enterprises.
2.2 Organization
Originally, social insurance bodies were special bodies
that were not directly integrated in the administrative
organization of a state. Sometimes, they are co-
14325
ISBN: 0-08-043076-7