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Dismantling the Welfare State? Reagan, Thatcher, and the Politics of Retrenchment

Será que a desigualdade de rendimentos aumentou durante os últimos tempos? Quem ganhou e quem perdeu neste processo? Este processo afectou todos os países da OCDE uniformemente? Em que medida é que maiores desigualdades de rendimentos são a consequência de maiores diferenças nos rendimentos dos trabalhadores e até que ponto são afectados por outros factores? Finalmente, como é que a redistribuição governamental através do sistema de benefícios fiscais afecta estas tendências?

Book Review: OECD, Growing Unequal? Income Distribution and Poverty in OECD Countries:

cal dimension: the UK, the EU and the US. The profound recent changes in the industrial relations framework in the UK are described by John Addison and Stanley Siebert. They describe anti-union legislation enacted during the period 19801993 and relate it to the recent decline of unionism. The authors further examine the accession of ‘New Labour’ and its related reform agenda. They also discuss the prospect of new legislation seeking to regulate the employment relation from the level of the European Union and its impact on relevant British legislation.

Growing public - social spending and economic growth since the eighteenth century

This paper aims to provide an introduction to the current state of the art of EUROMOD, the European Union tax-benefit microsimulation model. It explains the original motivations for building a multi-country EU-wide model and summarises its current organisation. It provides an overview of EUROMOD components, covering its policy scope, the input data, the validation process and some technical aspects such as the tax-benefit programming language and the user interface. The paper also reviews some recent applications of EUROMOD and, finally, considers future developments.

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EUROMOD: the European Union tax-benefit microsimulation model

Korpi and Palme’s (1998) classic “The Paradox of Redistribution and Strategies of Equality” claims that universal social policy better reduces poverty than social policies targeted at the poor. This article revisits Korpi and Palme’s classic, and in the process, explores and informs a set of enduring questions about social policy, politics, and social equality. Specifically, we investigate the relationships between three dimensions of welfare transfers—transfer share (the average share of household income from welfare transfers), low-income targeting, and universalism—and poverty and preferences for redistribution. We analyze rich democracies like Korpi and Palme, but we also generalize to a broader sample of developed and developing countries. Consistent with Korpi and Palme, we show (1) poverty is negatively associated with transfer share and universalism; (2) redistribution preferences are negatively associated with low-income targeting; and (3) universalism is positively associated with transfer share...

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Paradoxes of Social Policy Welfare Transfers, Relative Poverty, and Redistribution Preferences

There is a long-standing controversy in the academic literature over the question of whether targeting benefits towards the bottom part of the income distribution actually enhances or weakens their redistributive impact. Korpi and Palme have influentially claimed that “the more we target benefits at the poor, the less likely we are to reduce poverty and inequality”. The basic empirical underpinning of this claim is a strong inverse relationship at the country level between social transfer targeting and redistributive impact. This paper shows that this key finding no longer holds as a robust empirical generalisation. The relationship between the extent of targeting and redistributive impact over a broad set of empirical specifications, country selections and data sources has in fact become a very weak one, suggesting that the extent of targeting per se may not matter anymore as much as we have assumed since Korpi and Palme.

GINI DP 82: The paradox of redistribution revisited: and that it may rest in peace?

There is a long-standing controversy over the question of whether targeting social transfers towards the bottom part of the income distribution actually enhances or weakens their redistributive impact. Korpi and Palme have influentially claimed that "the more we target benefits at the poor, the less likely we are to reduce poverty and inequality". The basic empirical underpinning of this claim is a strong inverse relationship at the country level between social transfer targeting and redistributive impact. We show that this no longer holds as a robust empirical generalisation. The relationship between the extent of targeting and redistributive impact over a broad set of empirical specifications, country selections and data sources has in fact become a very weak one. For what it matters, targeting tends to be associated with higher levels of redistribution, especially when overall effort in terms of spending is high. We try to make substantive sense of this breakdown of the originally established relationship by focusing on two questions: first, what has changed in the countries originally included in the study and, second, what is different about the countries now additionally included in the analysis?

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The paradox of redistribution revisited: and that it may rest in peace?

The optimal design of redistributive systems continues to be a matter of considerable academic and public debate, with the optimal extent and intensity of pro-poor targeting remaining a key issue of contention. This article shows, first, that the overall relationship between pro-poor targeting and income inequality reduction is very weak. Although occasionally the association is positive, it is not robust, very weak, and effectively zero with various reasonable methodological decisions. Second, and more importantly, a detailed disaggregated analysis reveals that the most redistributive systems do contain subsystems that are strongly targeted to the poor by intent and by design. Third, we also show that a disaggregation over the function of social transfers is very relevant: old-age benefits are an important driver of the weak overall association, while for family benefits we find a positive relationship. Absolutely key, however, is our finding that means-tested systems play a crucial role in bringing about redistributive effectiveness, even if their relative size is small. We thus shed new light on the politics of targeting. While it remains important that broad sections of the electorate benefit from social transfers, strong pro-poor targeting within such a context is possible and indeed essential for real redistributive impact. Benefits for the poor need not be poor benefits if and when these are embedded in benefit systems that meet wider redistributive needs and rationales.

For the Poor, but Not Only the Poor: On Optimal Pro-Poorness in Redistributive Policies

To what extent can a country’s effectiveness in reducing child poverty be attributed to the size of family cash transfers (that is, both benefits and tax advantages) or to their design? In this paper, we disentangle the importance of each of these two factors, focusing on the family support system in Lithuania and comparing it with four other new member states. Both single parent and large families are increasingly susceptible to poverty in Lithuania. This contrasts with other former communist countries, namely Estonia, Hungary, Slovenia and the Czech Republic, which protect these family types much better. This paper examines whether their family transfer systems would achieve similar results in Lithuania. We employ the EUROMOD microsimulation tax-benefit model to swap family policies across countries and test whether size or design has greater effects on child poverty reduction in Lithuania. Hungarian, Slovenian and Czech policies would considerably improve the poverty situation among large families. Sin...

Is the neighbour’s grass greener? Comparing family support in Lithuania and four other New Member States

In the microsimulation literature, it is still uncommon to test the statistical significance of results. In this article we argue that this situation is both undesirable and unnecessary. Provided the parameters used in the microsimulation are exogenous, as is often the case in static microsimulation of the first-order effects of policy changes, simple statistical tests can be sufficient. Moreover, standard routines have been developed which enable applied researchers to calculate the sampling variance of microsimulation results, while taking the sample design into account, even of relatively complex statistics such as relative poverty, inequality measures and indicators of polarization, with relative ease and a limited time investment. We stress that when comparing simulated and baseline variables, as well as when comparing two simulated variables, it is crucial to take account of the covariance between those variables. Due to this covariance, the mean difference between the variables can generally (though not always) be estimated with much greater precision than the means of the separate variables.

Lina Salanauskaite

Papers

GINI DP 82: The paradox of redistribution revisited: and that it may rest in peace?

The paradox of redistribution revisited: and that it may rest in peace?

For the Poor, but Not Only the Poor: On Optimal Pro-Poorness in Redistributive Policies

Is the neighbour’s grass greener? Comparing family support in Lithuania and four other New Member States

Testing the statistical significance of microsimulation results : a plea