Public income transfers and wealth accumulation at the bottom: Within and between country differences in Canada and the United States

Both Canada and the United States are considered liberal welfare states, yet exhibit notable differences in income poverty attributed to social policy. While a more generous welfare system lifts many above income poverty, models of household financial behaviour suggest that more income from the state should displace private savings via a substitution effect. Using nationally representative wealth surveys from Canada and the US from 1998/1999 to 2016 we extend knowledge on the relationship between the welfare state and private wealth accumulation. Specifically, we study household asset poverty defined as financial asset levels that fall below three-month adjusted income poverty threshold. Asset poverty rates varied over time in the two countries and were higher in the less generous US welfare state. Further, income transfer share was positively related to asset poverty in Canada but not in the US. Counterfactual estimates offered evidence of the substitution effect in Canada, where higher levels of transfers may crowd out private asset accumulation. Results invite further consideration of the concept of asset poverty and its relationship to welfare state characteristics.     

Unemployment and economic security for young adults in Finland,Norway and Sweden: From unemployment protection to poverty relief

In this study, we investigated if there has been a displacement in the type and coverage of welfare services available for young unemployed adults in Finland, Norway and Sweden over the last two decades. This question is important because a number of studies have argued that the generous unemployment benefits and extensive labour market intervention found in the Nordic welfare states shield young people from the most severe consequences of economic inactivity. In this article, we instead show that during this period, less generous means‐tested unemployment and social assistance benefits have become the most important form of income protection for young people. In evidence, earnings‐related unemployment benefits now cover only 10 per cent of unemployed Swedes and Finns and 45 per cent of unemployed Norwegians aged 24 years or younger. This development marks a significant change in our understanding of unemployment protection for young people in Nordic countries.     

The politics of safety net reform in Southern Europe during the Great Recession: Introduction to the regional issue

Southern European welfare states have developed relatively solid social insurance income maintenance programs, but have lacked effective means-tested benefit systems to address poverty and protect outsiders. Spain and Portugal are usually considered the two first countries to depart from the traditional path with the creation of minimum income schemes between 1988 and 1995. In the Spanish case, minimum income programs were established at the regional level and are very heterogeneous despite their institutional stability. The limited extent of these programs in most Spanish regions must be put in the context of national means-tested income support schemes in the fields of pensions and unemployment. The introduction of these programs in the 1980s was also a significant path departure. The combination of these programs has offered some income support to low income groups left unprotected by traditional insurance benefits, although in a patchy and limited way, especially as regards the working-age population. The social effects of the Great Recession, especially in terms of long-term unemployment, evictions and impoverishment, have reopened the debate on how to combat monetary poverty, which has been on the general election agenda since 2014–2015. Most regions have reformed their programs in different directions since 2008, under the contradictory pressures of growing demand and financial constraints. Such debate, however, has not been able yet to set a clear basis for a new development of anti-poverty income support policy.     

Concurrent Participation in Federally-Funded Welfare Programs and Empowerment Toward Economic Self-Sufficiency

This research examined the impact of participation in federal means-tested welfare programs on the attainment and maintenance of economic self-sufficiency. Using the Survey of Income and Program Participation (SIPP), this quasi-experimental investigation compartmentalized 4216 low-income households into an intervention group (n?=?2436) and a comparison group (n?=?1780). Households in the intervention group received one or more welfare benefits for the most part of the 2008–2013 quinquennium. By contrast, those in the comparison group – although eligible for these benefits – did not receive them. The survey respondents were measured repeatedly over a 56-month period to assess whether welfare receipt impacts their household income steadily beyond 150% of the federal poverty level, after controlling for known predictors. Multivariate analyses displayed medium effect sizes indicating that participation in public assistance did decrease the likelihood of economic self-sufficiency. Macro-implications of these findings for poverty and social welfare stakeholders were discussed.     

A comparison of social assistance in China and Sweden

This article compares social assistance in China and Sweden, and finds a number of similarities. In both countries, benefits are regulated by a national policy, while local governments are responsible for administration. The proportion of the population receiving social assistance is surprisingly similar in China and Sweden. Social assistance reduces dire poverty but is less successful in raising full-year recipients above the poverty line used in international comparisons of developed countries. During the last decade, the income thresholds used to assess claims have not increased at the same rate as the mean income level in both countries. Not surprisingly, there are also substantial differences in the social assistance systems of the two countries. The Swedish system has a long history; the Chinese is relatively recent. The income thresholds differ in terms of their method of calculation and the extent of the relief they offer. While the same thresholds are applied across Sweden, in China they vary by location. The profiles of recipients also differ between countries.     

Low income and ‘poverty lines’ in Norway: a comparison of three concepts

Borgeraas E, Dahl E. Low income and ‘poverty lines’ in Norway: a comparison of three concepts
Int J Soc Welfare 2010: 19: 73–83 © 2008 The Author(s), Journal compilation © 2009 Blackwell Publishing Ltd and the International Journal of Social Welfare. In this article we address the question of how well three concepts of ‘poverty’ correspond with each other. We have compared three different measures of ‘poverty’ in Norway: income poverty and two measures of a minimum budget standard, one scientifically and one politically defined. The three measures rest on different underlying concepts, serve different purposes and yield significantly different poverty lines. If followed by the municipal social services, the governmental norms for social benefits will, paradoxically, leave the beneficiaries in income poverty as defined by that same government. The most generous poverty line of all three measures is provided by the minimum budget standard developed by the National Institute for Consumer Research in Norway, which rests on the assumption that a household's income has to give a sustainable financial situation in the longer run. Neither of the two other poverty measures have this property. All numbers pertain to the year 2005. Some political and practical implications of the findings are discussed.     

Poverty, welfare problems and social exclusion

This article investigates whether, and to what degree, poverty is linked to other types of welfare problems and, in larger perspective, whether the situation can be understood in terms of social exclusion. Two different measures of poverty – income poverty and deprivation poverty – and 17 indicators of welfare problems were used in the analysis. It was shown that income poverty was rather weakly related to other types of welfare problems, i.e. the most commonly used measure of poverty seems to discriminate a section of the population that does not suffer from the kinds of problems we usually assume that poverty causes. Deprivation poverty, identifying those who most often had to forgo consumption of goods and services, did correlate strongly with other types of welfare problems. Hence, people living under poor conditions do suffer from welfare problems even though this section of the population is not always captured by income poverty measures. The final analysis showed that the types of welfare problems that were most likely to cluster were deprivation poverty, economic precariousness, unemployment, psychological strain and health problems. Whether these types of accumulated welfare problems, from a theoretical perspective, can be seen as indicators of social exclusion is more doubtful.     

The effects of income transfers on poverty reduction in people with disabilities in South Korea

Using a nationally representative sample dataset from the 2016 Korean Welfare Panel Study, we examined the anti‐poverty effects of income transfers in people with disabilities. Our findings indicate that in households with a person with a disability, income transfers decreased by 55.9% and 84.8% of the pre‐transfer poverty rate and poverty gap, respectively. Before income transfers, households with a person with a disability were 1.94 times more likely to be poor compared to those without a person with a disability. When income transfers were offered, the chance of being poor in the disability group was only 1.11 times higher than that in the non‐disability group. Findings from the aggregated data suggest that means‐tested income transfers were more effective in reducing poverty levels than social insurance or private income transfers. At the individual level, the provision of means‐tested programs was also more likely to decrease the likelihood of experiencing poverty than social insurance and private income transfers.     

Poverty and material deprivation among European workers in times of crisis

Many EU countries are faced with abysmal public debts and high unemployment, and may have to reduce their social expenditure and deregulate their labour market, which should lead to an increase in ‘working poverty’ (i.e., an increase in the number of working men and women who live in a low‐income household, or in a household that cannot afford certain goods and services considered essential for a decent life, respectively). However, working poverty remains an under‐analysed phenomenon in Europe. Moreover, the vast majority of existing definitions used in Europe are based on a relative income poverty line and the EU's official definition of ‘in‐work’, which raises concerns about the robustness of existing findings. This article first examines how the socioeconomic situation has evolved in seven EU Member States that have fared differently. In addition, the article examines whether the use of non‐monetary poverty indicators and of an encompassing definition of ‘working’ has an impact on the conclusions drawn. An attempt is made to identify the main macro‐level determinants of changes in ‘working poverty’ and to better understand their impact at the micro‐level.     

Smaller net or just fewer to catch? Disentangling the causes for the varying sizes of minimum income schemes

The number of social assistance recipients varies significantly between welfare states. Social assistance is a last-resort residual benefit, so a high number of receipts may be related to policies for first-tier benefits, social assistance and their implementation, as well as need factors (unemployment rate and low income). Considering the strong political will to diminish the receipt of last-resort benefits, we demonstrated a way to decompose the reasons for eligibility in a cross-national analysis of two Nordic countries, namely Finland and Sweden. By using administrative register microdata, eligibility simulations and policy swaps, we found that the legislative features of social assistance, such as more extensive benefit norms and earning disregard, contribute to Finland's higher eligibility rate and likely explain some of the reasons for its higher number of recipients. Finland also exhibited lower non-take-up rates among those eligible, which implies better access to benefits than in Sweden.     

Can the minimum living standard guarantee scheme enable the poor to escape the poverty trap in rural China?

The rural Minimum Living Standard Guarantee (Dibao) Scheme is the most important social assistance programme in rural China. However, how the rural Dibao programme affects household expenditures and whether it can enable the poor to escape the poverty trap are questions that remain largely unexplored. This study used data from the 2012 Rural Household Survey in China to investigate the impact of the rural Dibao programme on household expenditures. We found that the programme significantly improved the well‐being of low‐income households. Particularly, the programme significantly increased household expenditures on housing, education and health; furthermore, the impact was greater for households with educated household heads. However, the programme did not significantly affect household expenditures on food, transportation or farming inputs. The results imply that participation in the rural Dibao programme induces household investment in human capital, which could help to break the inter‐generational transmission of poverty and raise long‐run welfare.     

Trends among social assistance recipients in Sweden since 1945

The proportion of the Swedish population that receives means-tested social assistance has not decreased since 1945. This has been cited as a surprising research finding, since there has been a general increase in the standard of living and in income equality during the same period. The income of assistance recipients is no lower than for a substantial minority of the non-recipient population. This analysis shows that assistance recipients differ from others with low incomes in that they have less wealth and more problems concerning welfare or standard of living. It is shown that groups that traditionally have had an overrepresentation of assistance recipients have generally increased in size since 1945. Even though supply-side hypotheses cannot be ruled out as explanations for the non-decrease of social assistance, evidence indicates the persistence of people in need of assistance due to their marginal economic position in the Swedish welfare state.     

Welfare Generosity in Europe: A Multi‐level Study of Material Deprivation and Income Poverty among Disadvantaged Groups

The aim of this study is to analyze whether and to what extent welfare generosity moderates the risk of income poverty and material deprivation among disadvantaged groups, that is, people with ill health, low education and lack of employment. The data are based on the 2009 European Union Statistics on Income and Living Conditions (cross‐sectional) surveys. The analyses comprise 27 and 28 European countries, including 292,874 and 302,343 individuals between 18 and 64 years of age. Multi‐level analyses demonstrated that welfare generosity moderated the risk of both material deprivation and income poverty. With few exceptions, the risk decreased among disadvantaged groups in absolute terms. Among individuals who experienced the combinations of limiting long‐standing illness and either low education or non‐employment, the absolute inequalities in material deprivation decreased with increasing welfare generosity. Also, the absolute inequalities in income poverty among individuals who experienced the combination of limiting long‐standing illness and low education were lower in more generous welfare contexts. Results indicated lower absolute levels of both material deprivation and income poverty among disadvantaged individuals in generous welfare states. However, for material deprivation the results were more substantial and consistent than for income poverty. Taken together, these findings support the view that generous welfare states reach the worst‐off and are successful in buffering material deprivation and income poverty and, hence, in reducing social inequalities.     

The effects of poverty on sleep problems in Sweden

Does relative poverty measured as low disposable household income or the presence of personal financial crisis affect health measured in terms of self-reported sleep problems? If so, is this effect modified by macroeconomic conditions or life changes such as unemployment experience, divorce or limiting illness, and it is buffered by social networks or coping behavior such as smoking? These questions are studied on a representative sample of employed people aged 20-65 who participated in the Survey of Living Conditions conducted by Statistics Sweden for the years 1980-1981 (7180 people) and 1986-1989 (13,376 people). The results reveal a conditional relationship between poverty and sleep problems. Among men it is modified, in particular, by previous experience of unemployment. Among women strong social networks buffers the effect but smoking aggravates it. Men's sleep was affected more by poverty and unemployment in the late 1980s than in the earlier period.     

Unemployment and conditional welfare: Exclusion and belonging in immigrant women's discourse on being long‐term dependent on social assistance

Long‐term unemployment with dependency on social assistance in Sweden has increased and is particularly high among foreign‐born persons. The present study explored immigrant recipients' experiences of being welfare reliant. Swedish‐Iraqi women's construction of exclusion and belonging in relation to policies and welfare regulations was scrutinised. The women referred to unemployment with frustration, expressing that it renders dependence on social welfare and enforces adherence to the stipulations of the social services. The individual's mobility and agency are restricted and concerted efforts to obtain employment are futile, which increase the sense of exclusion. However, the entitlement to social assistance also engenders feelings of belonging, of being connected to and cared for by the new country. More research is needed to examine the role that social assistance regulations play in forming feelings of belonging and exclusion. It appears essential that political initiatives be taken to reverse the trend of high unemployment among foreign‐born persons.     

Comparing income poverty gap and deprivation on social acceptance: A mediation model with interpersonal communication and social support

In many developed countries or regions, wide income disparities increase the difficulty in reducing poverty. In their day‐to‐day lives, poor people often feel less accepted by the society. The failures in communicating with social groups and receiving social support lead to negative consequences on individual well‐being and higher level of social exclusion. Based on the debate upon alternative approaches to conceptualizing and operationalizing poverty, this study attempts to verify a mediation model with data from a household survey (N = 1,202) in Hong Kong. The results of structural equation modelling reveal that deprivation is a more powerful indicator than income poverty for specifying the negative relations of poverty with interpersonal communication, social support, and social acceptance; the negative impact of deprivation on social acceptance can be reduced by two significant mediators of interpersonal communication and social support. The results are discussed in terms of directions for future research and policy and welfare intervention.     

Poverty among households with children: a comparative study of Norway and Germany

The purpose of this study was to compare poverty among lone parent households and couple households with children in Norway and Germany. The study applied three different measurement strategies: income poverty, material deprivation and reception of social assistance. We found that income poverty and material deprivation rates are higher in Germany than in Norway and are also higher for lone parents than for couples with children. Our analysis of the reception of social assistance shows a different pattern in which both Norwegian and German lone parents frequently receive social assistance. The results show that the different dimensions of poverty are not independent of one another, nor do they wholly overlap. Household characteristic variables, factors influencing labour market status and educational levels also seem to influence the risk of experiencing poverty.     

Negotiating poverty from midlife to pre-old age: a longitudinal study on social assistance recipients in Shanghai

The minimum living standard guarantee (MLSG) programme is part of the social security system in Mainland China designed to tackle urban poverty. To understand how the urban poor manage under this programme, this study interviewed 40 households receiving MLSG assistance in Shanghai. Our findings were as follows: (a) a large proportion of the interviewees who received MLSG assistance from the government were pushed to do so because of the massive layoffs during the economic reform; (b) the MLSG recipients were likely to be trapped in a poverty cycle from middle age up until they reached official retirement age.     

Financial hardship during unemployment in Norway: the impact of public and private income support

It is common to assume that long-term unemployment no longer causes financial hardship because of generous welfare benefits. It is further assumed that unemployment benefits have eroded the traditional role of the family in protecting its members against hazards. This panel study of long-term unemployed people in 1991-1992 demonstrates the inadequacy of unemployment benefits and the importance of family support in reducing the risk of financial hardship. Vulnerable household types, such as single people and families with limited economic resources, at the outset seem unable to bear the personal risk of unemployment that is built into the benefit scheme. Persons disadvantaged at the outset risk a downward spiral because of long-term unemployment. Especially during times of high unemployment, the compensation level is not optimal from a welfare point of view. Greater coverage and more generous unemployment benefits may help unemployed people to cope better financially and thus avoid applying for discretionary and highly stigmatized social assistance allowance.