Welfare states and inequality: Institutional designs and distributive outcome

Comparative studies on inequality have suffered from severe methodological problems, which mean that issues related to the causes of cross-national variation in inequality remain unresolved. In comparative welfare state research, the preoccupation with expenditure data has also meant that the welfare state itself has remained a black box. By examining new comparative data on social policy institutions and income inequality among different population groups, this study provides a more precise empirical basis for evaluating different, and divergent, theories on the welfare state and equality. Three cases will be used as illustrations: family policy and child poverty, unemployment benefits and poverty among working aged, and old-age pensions and poverty among the elderly. The results suggest that the key for understanding the effect of the welfare state lies in the institutional design—in the level and distribution of social rights. The importance of the welfare state for social stratification deserves to be given more attention by sociological research in the future.     

The European 'Welfare Mix': Institutional Configuration and Distributive Outcome in Sweden and the European Union. A Longitudinal and Comparative Perspective

This paper explores the institutional configuration (the three welfare delivery systems: market, welfare state, family) and its distributional correlates (income inequality; poverty rates; inequality related to social cleavages such as social class, generation, gender, region and family). The analysis has a twofold perspective: comparative (comparing 14 EU member states) and longitudinal (comparing Sweden 1975--1995), using nations as statistical units. The European union appears to be divided in three distinct and homogeneous clusters: a Nordic cluster (Sweden, Denmark, Finland) exhibiting large social expenses, high labour market participation and weak family ties. Its distributional features are low income inequality, poverty rates and class inequality, but high levels of inequality between generations; a southern cluster (Greece, Italy, Spain, Portugal) characterised by lower welfare provisions, low employment, but strong traditional families. Its distributional features are high levels of income inequality, poverty and class inequality, but low levels of generational inequality; a central European cluster in intermediate position. UK joins the southern cluster with high levels of income inequality, poverty and class inequality.     

Institutions and Poverty: A Critical Comment Based on Evolving Currents and Debates

Tebaldi and Mohan (Journal of Development Studies 46:1047–1066, 2010) have established an empirical relationship between institutions and monetary poverty. We first, reflect their findings in the light of recent development models, debates and currents in post-2010 literature. We then re-examine their results with a non-monetary and multidimensional poverty indicator first published in 2010. Our findings confirm the negative relationship and the nexus disappears with control for average income. Hence, confirming the conclusions of the underlying study that institutions could have an indirect effect on multidimensional poverty. In other words, the poverty eradication effect of institutions is through average income as opposed to income inequality. We discuss how the findings provide insights into: (1) the Chinese model versus sustainable development; (2) debates over preferences in economic rights; (3) China’s development and outlook; (4) the Fosu conjectures and (5) Piketty’s and Kuznets’ literatures.     

Welfare Attitudes Towards Anti-poverty Policies in China: Economical Individualism,Social Collectivism and Institutional Differences

Public attitudes towards welfare programs is a crucial topic in the field of social policy research. Current studies on welfare attitudes has long been a lack of an explicit conceptualization, and mainly conducted at the individual level with the focus on self-interest. This study distinguished the dimensions of welfare attitudes into responsibility, efficiency and effectiveness, and examined the factors that influence welfare attitudes towards anti-poverty policies in China. Data used in this study came from Chinese National Survey of Public Welfare Attitudes in 2018 with a final sample size of 8296 respondents from three deliberately selected provinces in China. It concluded that welfare attitudes share the traits of economical individualism, social collectivism and institutional differences. Positive perception of work ethics and social cognition about income inequality were two important factors associated with welfare attitudes towards anti-poverty policy. People who were against indolence, idleness and male breadwinner and who were highly sensitive of income inequality were more supportive of the notion that government is responsible for protecting their livelihood, nevertheless, less satisfied with the current standard of substance allowance and performance of policy implementation, indicating an orientation of both individualism and collectivism of welfare attitudes. Besides, welfare attitudes were also motivated by institutional differences such as regional disparities and migrant identity. Therefore, this study suggests that the government should be need-oriented in dealing with of the different dimensions of poverty, and should establish a more unified and generous social welfare system that benefits both the natives and migrants.

     

Income sufficiency v. poverty Results from the United States and The Netherlands

The purpose of this paper is to further the understanding of subjective measures used to assess poverty and to add to the literature on poverty measurement methodology. In particular, the paper focuses on the minimum income question (MIQ) first proposed by Goedhart and colleagues (1977). Data from the U.S. Consumer Expenditure Survey and from a Dutch newspaper survey are used. The primary contribution of the paper is the inclusion of household expenditures as additional explanatory variables of minimally necessary income. Significant differences between the coefficients of several categories of expenditures, particularly for leisure, appear to reveal differences in the interpretation of the minimum income question by respondents. Thus, we question the underlying assumption of the MIQ that everyone adheres the same welfare meaning to the phrase “minimally necessary income,” and conclude that the resulting thresholds should not be used as to measure poverty before further research has been carried out to explore what respondents are thinking when they answer questions such as the MIQ.     

Globalization and Inequality: A Norwegian Report

Is global inequality increasing? Some authoritative voices—for example, from the United Nations Development Programme—assert unequivocally that it is, and have carried popular belief with them. Others see a more nuanced and on balance a positive picture. Any attempt to answer the question must grapple with many conceptual and measurement difficulties. These are not wholly eliminated even if the inequality in question is narrowed to that among the per capita incomes of countries, ignoring intracountry differences in income. Disagreement about the empirical record has not impeded argument over causes. Globalization—the expansion of trade, investment, and technology flows among states that is making for a more integrated world economy—is invoked on both sides: seen by some as further marginalizing the world's poor, by others as offering a route out of poverty. The starkly different positions surface in the heated debates that have surrounded the World Trade Organization and the proposal for a Multilateral Agreement on Investment. The nature of trends in international inequality and the role in them of globalization are explored in a recent report issued by the Norwegian Ministry of Foreign Affairs, Globalisation and Inequality: World Income Distribution and Living Standards, 1960–1998 (October 2000), the summary from which is reproduced below. The report finds that global inequality between countries has decreased over the last four decades. Globalization may or may not have contributed to that outcome, but at least does not appear to work against it. In sum, “not everything has turned out badly; in fact there has—in spite of the setbacks in some regions and in spite of population growth—been considerable global progress during the last decades.” Given the chosen focus on inequality, there is little discussion in the report of that other dimension of global progress: changes in absolute income levels. But in assessing the implications of development for human welfare, the issue of economic growth and its relationship to globalization is clearly pertinent. Footnote 4 offers a passing glimpse of that dimension, referring to changes in absolute poverty. The World Bank's World Development Report 2000/2001 estimates that the number of people in absolute poverty (living on less than $1 a day) changed little between 1987 and 1998: it went from 1.18 billion to 1.20 billion. As the population grew, this meant a modest reduction in the proportion in absolute poverty in the world population (excluding the rich countries): from 28.3 percent to 24.0 percent. But in the East Asia and Pacific region—a region characterized by both rapid overall economic growth and increasing integration into the global economy—the number of poor dropped from 418 million to 278 million during the same period, with the proportion dropping from 26.6 percent to 15.3 percent. The report was commissioned from the Norwegian Institute of International Affairs (NUPI), and prepared by Ame Melchior, Kjetil Telle. and Henrik Wiig. It is available online both in its English version and in its original (and longer) Norwegian version—the former at http://odin.dep.no/ud/engelsk/publ/rapporter/index‐b‐n‐a.html , the latter through the Ministry's parallel Norwegian‐language site.     

Problem shifts in the study of welfare states and societal inequalities

This paper takes stock of questions in the field of welfare states and societal inequalities and related areas in sociology. Within general sociology, Lenski offered the question of who gets what and why, and the first generation of studies on welfare and inequality ranging from Cutright to Hewitt replaced questions about income shares for percentile groups by questions about state social security expenditures. Korpi, who initiated a second generation of studies, affected a change towards questions about individual benefit levels relative to the income of members of the working population. Commentators like Baldwin have pointed out that these questions are questions about solidarity, another problem in general sociology. This paper concludes by arguing in favour of a third problem shift, in which questions about the solidarity disfavoured people receive are complemented with questions about the solidarity advantaged people give.     

Does Horizontal Inequality Matter in Vietnam?

This paper examines the issue of horizontal inequalities in Vietnam over the past 20 years. Using data from three recent Vietnam population censuses (1989, 1999, and 2009) and three Vietnam Household Living Standard Surveys (1998, 2008, 2012), we estimated numerous measures on inequalities between five groups against four welfare indicators. Our results show that horizontal inequality matters in Vietnam, in particular for ethnicity, region, and rural/urban groups. While there has been an improvement in horizontal inequality in education, this paper shows little change in other welfare indicators, in particular poverty. We also found that horizontal inequality does matter for poverty reduction in Vietnam and it needs more attention when designing poverty policies in the future.

     

Incidence, Depth and Severity of Children in Poverty

Recently, the first ever estimate of the number of children living poverty in developing countries was undertaken. The incidence of child poverty was estimated by establishing how many children suffer severe deprivation in at least one out of seven indicators which are internationally recognized as their rights as well as constitutive of poverty. This is a major step forward in the analysis of poverty. In this paper, we generalize these findings on the incidence of children living in poverty by exploring how to estimate the depth and severity of child poverty. Two countries can have the same proportion of children living in poverty, however, the actual plight of children could be very different depending on how many deprivations, on average, children suffer. In addition, even if they suffer from the same average number of deprivations, these deprivation could be the same for all children or be very unevenly distributed. We show how these considerations can be used to estimate the depth and severity of poverty. We use regional data to provide applied examples of this methodology. The method proposed in this paper is similar to the one used to estimate the incidence, depth and severity of income poverty. The paper also offers some possible generalizations and ways forward for future research.     

The Poverty-Growth-Inequality Triangle: Asia 1960s to 2010s

The main objective of this paper is to disentangle the poverty-growth-inequality triangle for Asia, its sub-regions and individual economies by constructing poverty and inequality profiles, decomposing poverty changes and modelling inequality. Due to a shortage of unit record data, analytical techniques are developed for estimating the poverty headcount ratio and regional inequality with minimum data requirements. Analytical results confirm significant reductions in poverty across the board due to fast growth, although the benign effect of growth on poverty was offset by worsening distributions in many economies. Furthermore, the poverty-reducing effect of growth has been diminishing over time and converging to 0 for many countries. Also, the cost of rising inequality in Asia was found to be surprisingly large in terms of missed poverty reduction. Looking ahead, Asia is expected to eradicate abject poverty soon but likely to continue facing high inequality, particularly income gaps between economies.

     

Multi-Dimensional Deprivation in the U.S.

This paper presents a comprehensive analysis of multidimensional deprivation in the U.S. since the Great Recession, from 2008 to 2013. We estimate a Multidimensional Deprivation Index by compiling individual level data on several well-being dimensions from the American Community Survey. Our results indicate that the proportion of the population that is multidimensional deprived averages about 15 percent, which exceeds the prevalence of official income poverty. Lack of education, severe housing burden and lack of health insurance were some of the dimensions in which Americans were most deprived in. Though deprivation increased during the recession, it trended towards a decline between 2010 and 2013. Unlike the official and the supplemental poverty measure which did not show any decline, the deprivation index better reflects the economic recovery since the recession. Overall, the prevalence of deprivation was higher in the southern and the western states and among the Asian and the Hispanic population. Importantly, there was not much overlap between individuals who were income poor and those who were multidimensional deprived. In fact, almost 30 % of individuals with incomes slightly above the poverty threshold experienced multiple deprivations. Our analysis underscores the need to look beyond income based poverty statistics in order to fully realize the impact of the recession on individuals’ well-being.     

The impact of taxation on the distribution of wealth in an economy with changing population

The paper investigates into the determinants of the personal distribution of income and wealth. In an overlapping generations model all individuals are assumed to be identical except for their inherited wealth. Since life time is random the bequest of an individual and thus the inherited stock of capital of its children are stochastic variables. Taxation and social security contributions affect life cycle savings, bequests, and, eventually, the distribution of income and wealth in the society. It is shown that, in general, higher tax rates reduce distributive inequality as long as the rate of interest is exogenously given. In steady state, however, where the rate of interest is determined endogenously, increasing taxation and higher social security payments both diminish the capital labor ratio so that the rate of interest rises. If this interest effect is strong enough then it may outbalance the tendency toward more equality because higher interest rates enhance initial differences in the distribution of both income and wealth and, eventually, the inequality in the distribution of income and wealth in the society.     

Poverty,Inequality and Deprivation in South Africa: An Analysis of the 1993 SALDRU Survey

This paper analyses poverty and inequality in South Africa based on data from a comprehensive multi-purpose household survey undertaken in 1993 to provide baseline statistics on poverty and its determinants to the new government. The paper shows that South Africa has among the highest levels of income inequality in the world and compares poorly in most social indicators to countries with similar income levels. Much of the poverty in the country is a direct result of apartheid policies that denied equal access to education, employment, services, and resources to the black population of the country. As a result, poverty has a very strong racial dimension with poverty concentrated among the African population. In addition, poverty is much higher in rural areas, and particularly high in the former homelands. Poverty among female-headed households and among children is also higher than average. Moreover, poverty is closely related to poor education and lack of employment. The poor suffer from lack of access to education, quality health care, basic infrastructure, transport, are heavily indebted, have little access to productive resources, and are heavily dependent on remittances and social transfers, particularly social pensions and disability grants. The paper uses an income-based definition of poverty for most of the analysis. In addition, it develops a broad-based index of deprivation including income, employment, wealth, access to services, health, education, and perceptions of satisfaction as its components. While on average the two indicators correspond fairly closely, the income poverty measure misses a considerable number of people who are severely deprived in many of the non-income measures of well-being. This group of severely deprived not identified by the income poverty measure consists predominantly of Africans living in rural areas, concentrated particularly in the province of KwaZulu/Natal.     

Population growth and poverty in the developing world

The links between rapid population growth and the absolute poverty currently affecting 780 million people in the developing countries (excluding China and other centrally planned economies) were examined. Absolute poverty is defined as having less than the income necessary to ensure a daily diet of 2150 calories per person ($200 per person a year in 1970 United States dollars). Focus is on poverty and demography in the developing world (defining poverty; income, fertility and life expectancy; demographic change and poverty), effect of poverty on fertility, family planning programs and the poor, and the outlook for the future. Rapid population growth stretches both national and family budgets thin with the increasing numbers of children to be fed and educated and workers to be provided with jobs. Slower per capita income growth, lack of progress in reducing income inequality, and more poverty are the probable consequences. Many characteristics of poverty can cause high fertility -- high infant mortality, lack of education for women in particular, too little family income to invest in children, inequitable shares in national income, and the inaccessibility of family planning. Experience in China, Indonesia, Taiwan, Colombia, Korea, Sri Lanka, Cuba and Costa Rica demonstrate that birthrates can decline rapidly in low income groups and countries when basic health care, education, and low-cost or free family planning services are made widely available.     

中国城乡弱相对贫困测算及时空演变：2012—2018

相对贫困的识别和测算是瞄准贫困人口和制定减贫政策的基础,但常用于识别相对贫困人口的比例收入法和测度相对贫困程度的FGT指数在理论基础、比例设定和贫困性质方面遭到质疑。采用基于社会融入成本理论的弱相对贫困人口识别方法,及与弱相对贫困线相适应的分层可加综合贫困指数,且考虑与现阶段我国绝对贫困线衔接性及国际标准的可比性,使用2012—2018年中国家庭追踪调查(CFPS)数据估计了中国城乡收入(消费)弱相对贫困线,并测算分析了中国城乡收入(消费)弱相对贫困程度及时空演变特征。研究表明,基于弱相对贫困线构造的综合贫困指数兼顾绝对贫困和相对贫困,可以避免传统FGT指数分别测度绝对贫困和相对贫困时动态变化趋势出现分歧的问题,可更为直观地综合评估经济增长和扶贫政策的减贫效应。无论城乡,尽管不平等导致相对贫困始终处于高位水平,但绝对贫困更大的下降幅度使得中国收入(消费)弱相对贫困程度仍呈稳健下降趋势。从社会融入成本角度出发,建议未来考虑住房成本和子女养育成本,分家庭类型进一步细化弱相对贫困标准。本研究有助于进一步分类瞄准弱相对贫困人口,监测弱相对贫困程度演变并综合评估减贫效应。     

Does National Income Inequality Affect Individuals’ Quality of Life in Europe? Inequality,Happiness, Finances,and Health

This paper analyses the effect of income inequality on Europeans’ quality of life, specifically on their overall well-being (happiness, life satisfaction), on their financial quality of life (satisfaction with standard of living, affordability of goods and services, subjective poverty), and on their health (self-rated health, satisfaction with health). The simple bivariate correlations of inequality with overall well-being, financial quality of life, and health are negative. But this is misleading because of the confounding effect of a key omitted variable, national economic development (GDP per capita): Unequal societies are on average much poorer (r = 0.46) and so disadvantaged because of that. We analyse the multi-level European Quality of Life survey conducted in 2003 including national-level data on inequality (Gini coefficient) and economic development (GDP) and individual-level data on overall well-being, financial quality of life, and health. The individual cases are from representative samples of 28 European countries. Our variance-components multi-level models controlling for known individual-level predictors show that national per capita GDP increases subjective well-being, financial quality of life, and health. Net of that, the national level of inequality, as measured by the Gini coefficient, has no statistically significant effect, suggesting that income inequality does not reduce well-being, financial quality of life, or health in advanced societies. These result all imply that directing policies and resources towards inequality reduction is unlikely to benefit the general public in advanced societies.     

Raumspezifische Armutsgefährdung im Alter

The aim of this article is to investigate income poverty risks of older people in Austria considering spatial aspects. By comparing rural and urban regions it should be tested whether spatial variables exert a significant effect on the income poverty risk of older people and how such an effect can be explained. Thus, specific aspects of rural poverty among older people are discussed. The empirical analysis is based on EU-SILC 2004. A binary-logistic regression model is applied in order to test the effect of local population density and local population size on the poverty risk of older people. Results show that the poverty risk of both older people and retirees increases significantly if population density decreases. The effect of local community size, however, was insignificant. For the younger population (< 60), on the contrary, poverty risk increases significantly with both decreasing population density and local community size.     

Operationalizing De-commodification and De-familization Outcomes via the Relative Poverty Approach: An Application to Western European Countries

This article develops an approach with which to operationalise the outcomes of de-commodification and de-familisation processes. Since the de-commodification and de-familisation concepts share an emphasis on ‘a socially acceptable standard of living for individuals’ with the notion of relative poverty, the income-poverty indicator has been adopted to develop pertinent national rates. In particular, since de-commodification outcomes concern people with a socially acceptable standard of living independently of sale of their labour power, the national proportions of individuals with an equivalised disposable income above the poverty threshold who have stopped working have been accounted for. On the other hand, given that de-familisation outcomes regard individuals with a socially acceptable standard of living aside from family relationships, the national percentages of persons who actually live alone, or simulated as living alone, with an equivalised disposable income above the poverty threshold have been considered. Moreover, exploiting the equivalised disposable income computation, pertinent micro-simulations are developed to capture the role of the state and the family in de-commodification outcomes, and the contribution of the market and the state to de-familisation outcomes. On the basis of the European Union Statistics on Income and Living Conditions, an empirical application of this approach is then provided. Specifically, data for 16 European countries were used to compute the above-mentioned national rates. Furthermore, we checked whether our outcome figures exhibited any correspondence with the country-groups deriving from the classic welfare regime typologies or more in general with the measures resulting from the social policy structure.     

Income Inequality and Subjective Well-being: A Cross-National Study on the Conditional Effects of Individual and National Characteristics

In this study we raise the question how a nation’s income inequality affects subjective well-being. Using information on 195,091 individuals from 85 different countries from the World Value Surveys and the European Value Surveys, we established that in general, people living in more unequal countries report higher well-being than people from more equal countries. This association however does not apply to all people similarly. First, the positive effect of a nation’s income inequality is weaker when individuals express more social and institutional trust, and underscore egalitarian norms to a larger extent. Second, the positive association between national income inequality and subjective well-being is less strong for people from countries with high levels of social and institutional trust. So, our research predominantly indicates that there are far-reaching effects of an individual’s and a nation’s trust on people’s well-being.     

Ethno-Linguistic Affiliation and Income Poverty in Native Households with Children: Finland 1987–2011

The child poverty rate has increased noticeably in Finland since the mid-1990s, and there are numerous studies in this area. However, little is known about child poverty in the two native and equal population groups, Finnish speakers and Swedish speakers. Using detailed register-based data that cover the period 1987–2011, we analyze how child poverty depends on parental ethno-linguistic affiliation, and whether there is variation in income poverty across these households over time. The poverty measure is relative and based on equalized taxable household income of households with children. Odds of poverty are estimated with logistic regression models using generalized estimating equations to account for repeated observations at the household level. The analyses are restricted to areas with both Swedish- and Finnish-speaking settlement. Single-parent and two-parent households are analyzed separately. Poverty rates increased in all major types of households during the study period, but variation by ethno-linguistic affiliation was fairly modest. Swedish-speaking single-parent and two-parent households experienced a smaller increase in the poverty rate than Finnish-speaking ones, while patterns observed for exogamous households were less clear. The contribution of control variables on the ethno-linguistic poverty differences was modest. Considering that the ethno-linguistic groups studied are indigenous and equal, the small differences in poverty rates between Finnish speakers and Swedish speakers are evidence of a democratic and well-functioning welfare state, although the increasing overall poverty rates over time require future scrutiny by both policy makers and researchers.