A key distinction in models of social policy and typologies of welfare provision has been a differentiation between residual and institutional types. However, despite the gradual elaboration of models based on this distinction, there has been little effort to apply them in empirical comparative analysis or to assess the strengths and weaknesses of the models. This article initially examines two main approaches in identifying types of welfare states and major welfare state variations. It subsequently applies several dimensions of variation posited by the residual and institutional models in a comparison of the United States, the United Kingdom, the Netherlands and Sweden. This comparison forms the point of departure for evaluating the merits and limitations of models based on the residual‐institutional distinctio