Has the redistributive effect of social transfers and taxes changed over time across countries?

In most Member countries of the Organisation for Economic Co‐operation Development (OECD), the income gap between rich and poor has widened over the past decades. This article analyses whether and to what extent income taxes and social transfers have contributed to this trend. Has the redistributive impact of different social programmes changed over time? We use microdata from the LIS Cross National Data Center in Luxembourg for the period 1982–2014 and study both the total population and the working‐age population. In contrast to the results of some other studies, especially by the OECD, we do not find that redistribution has declined. Tax‐benefit systems around 2013 are more effective at reducing income inequality compared to the mid‐1980s and the mid‐1990s, especially among the total population. Changes in social programmes are not a driver of greater income inequality across the countries included in this study.     

Linking taxation and social protection: Evidence on redistribution and poverty reduction in Ethiopia

Although redistribution results from the simultaneous effects of taxes and transfers, analyses of their distributional effects in low‐income countries have largely been undertaken from singular perspectives. This article jointly assesses the distributional effect of taxes and transfers (through social protection) using Ethiopia as a case study. We find that Ethiopia's flagship social protection programme is more effective than income taxation in achieving poverty reduction, while neither policy achieves a sizeable reduction in overall inequality. We also find that Ethiopia does not currently have the capacity to close the poverty gap or to fully fund its main safety net programme using domestic income sources alone.     

The redistributive effect of social transfer programmes and taxes: A decomposition across countries

The aim of this article is to offer detailed information of the redistributive impact of social transfer programmes and taxes in 28 Member countries of the Organisation for Economic Co‐operation and Development, employing data that have been computed from the Luxembourg Income Study's micro‐level database. We find that welfare states on average reduce inequality by 35 per cent. Social benefits have a much stronger redistributive impact than taxes. As far as social programmes are concerned, public pensions account for the largest reduction in income inequality, although the pattern is diverse across countries. To a lesser extent, social assistance, disability and family benefits also contribute to smaller income disparities.     

The effectiveness of poverty reduction and the target efficiency of social security transfers in South Korea, 1999–2003

The purpose of this study was to investigate the impact of social security transfers between 1999 and 2003 in South Korea, the period during which the Asian economic crisis of 1997 occurred. The study used a secondary data set, which is part of the Korea Labour Panel Data. Of 5,000 original household samples, the results for the 2,728 households (54.6 per cent) that completed the surveys for all five years studied were analysed. One finding was that the average percentage of social security transfers appeared to be nominal, as was the 1.9 per cent in 1999, which grew to 2.4 per cent in 2003. Another finding was that the average poverty-reduction effectiveness for the five-year period was as low as 7.9 per cent, indicating a slightly increasing pattern. This percentage is only one-seventh to one-tenth that of Western countries. Target efficiency appeared to be 31.8 per cent. We give the following reasons to explain why the level of the poverty-reduction effectiveness of Korean social security transfers is comparatively low: the immaturity of the Korean Old Age Pension; the lack of diversity in social transfer programmes; and a cultural factor of stronger dependency on private transfers within the family structure.     

Effectiveness of Social Welfare Programmes in East Asia: A Case Study of Taiwan

Using the 2008 Family Income and Expenditure Survey, this study examined the effectiveness of social welfare programmes in Taiwan. The empirical evidence shows that most types of social welfare spending were limited in 2008. However, the social welfare programmes that were in place substantially reduced income inequality in Taiwan. Using the Organisation for Economic Co‐operation and Development (OECD) poverty threshold, the results reveal that 14 per cent of the sample's families were poor in terms of market income, but this figure decreased to 7 per cent after government intervention. Income inequality in Taiwan was similar to that of other East Asian countries such as Japan and South Korea, but Taiwan spent much less money on social welfare programmes than OECD countries, and therefore Taiwan's reduction of poverty was much lower as well.     

Kosovo's social policy during self‐management,UNMIK and independence: Persisting high inequality and social exclusion

This study examined: (i) Kosovo's social policy's poverty and inequality outcomes in recent history, namely during Yugoslav self‐management socialism (1952–1989), the United Nations Mission in Kosovo (UNMIK) (1999–2008) and independence (2008 onwards), and (ii) the impact of local politics in the more recent trajectory of social policy. The study shows that the poverty rate after the war (1999) is significantly lower than it was during socialism, but that there is persistent high and deepening Gini inequality and social exclusion. Transfers and taxes of the residual‐liberal policy have reduced more pretransfer–pretax inequality, and especially poverty, compared with self‐management's insurance‐dominated socialism, but their effectiveness is declining due to the policy's underlying long‐term, pro‐market logic and its increasing particularism with respect to short‐term transfers. The article argues that the main local political cleavages have originated from self‐management socialism's extensive stratification. These cleavages matter in distributive conflicts, and they mattered also during the UNMIK period by easing the pathway for the unprecedented influence international organisations have had on policy formation.     

Lone-parent Families in Europe: A Variety of Economic and Social Circumstances

The third wave of the European Community Household Panel Survey (ECHP) shows that 12 per cent of European families were lone-parent families in 1996. Nine single parents out of ten are women, usually divorced or separated. The proportion of lone parents under 30 varies from 3 per cent in Italy to 20 per cent in the United Kingdom. Most lone parents are in work, and very often occupy a full-time job, but the employment rate ranges from only 40 per cent in Ireland and the United Kingdom to 75 per cent in France and Denmark. Lone-parent families benefit from social transfers more often than other families, and for higher amounts, but poverty is more common than in other households, except in Denmark, Greece and Portugal. The housing circumstances of lone-parent families vary widely from country to country. In the south of Europe, 25 to 40 per cent are lodging in a larger household, suggesting solidarity within the extended families. This paper classifies the nations of Europe into five groups in terms of the overall circumstances of lone-parent families. Anglo-Saxon countries have the highest proportion of lone parents, with the least labour market participation and lower incomes. In contrast, lone parents in Scandinavian countries are more often at work and no more affected by poverty than other types of households.     

Who Wants to Redistribute? An Analysis of 14 Post‐Soviet Nations

We investigate population groups' attitude regarding inequality reduction in post‐Soviet transitional countries of the Baltic, Central Asia and the Caucasus, as well as the Slavic countries and Moldova. Empirical evidence presented in this article demonstrates that despite skyrocketing inequality, erosion of social provisions and efforts to introduce an individualistic market economy ideology during the last 15 years, overall support for redistribution and welfare state efforts to counterbalance rising inequality remained strongly legitimized among citizens in all post‐Soviet countries. Nevertheless, there are differences between population groups in attitude: the older, the less educated, the poor and women express more support for redistribution; while the younger, the better educated, the rich and men tend to not support redistribution. Populations in transitional countries of the Caucasus and Central Asia that face higher inequality and less effective redistribution policies expressed a strong desire for more redistribution and more active social welfare policies.     

Comparing the Pension Promises of 30 OECD Countries

This paper takes a microeconomic approach to compare prospective pension benefits in the 30 OECD countries. It shows entitlements gross and net of taxes and social security contributions for male and female single workers based on 2002 pension rules and parameters. The models cover all public and private mandatory sources of retirement income for full‐career private‐sector workers across a broad earnings range. The paper shows that average earners in OECD countries can expect a post‐tax pension of about 70 per cent of their earnings after tax. The average minimum retirement benefit is just under 29 per cent of national average earnings.     

The performance of the Australian welfare system in a time of neoliberal economic reform

“Neoliberalism”, both as a body of theory and as a set of policies and practices, is commonly seen as unsympathetic, even antagonistic, to the welfare state. In the period from the mid‐1980s to the global financial crisis of 2007–08, Australia underwent very considerable “neoliberal” economic policy reform. What happened to the Australian welfare system and to Australia's socioeconomic egalitarianism in this period? To shed light on that question three kinds of trend are tracked. The first is household taxes and social expenditure in both cash and kind, using fiscal incidence analysis where the main metric is “net benefits”. The second is economic inequality, as measured by the distribution of incomes and wealth. The third is the performance of the labor market, as measured by earned incomes and unemployment rates. The article concludes with an attempt to integrate the evidence collected from these three sources. The general conclusion is that the Australian welfare system did not follow the pessimists' predictions. The welfare system grew in size and redistributive quantum. Wage levels rose strongly, while unemployment rates fell. Overall, income inequality increased to a small extent, though mainly before the full economic reform process was in place, while wealth inequality changed little.     

Socioeconomic status,perceived inequality of opportunity,and attitudes toward redistribution

Previous research suggests that an individual’s socioeconomic status (SES) is negatively associated with attitudes toward redistributive policies. The objective of this study is to examine whether the relationship between an individual’s subjective SES and his or her attitudes toward redistribution is contingent upon perceptions of inequality of opportunity. A series of multilevel analyses was performed using data from 28 countries from the 2009 International Social Survey Program (ISSP). Results revealed that the relationship between individual SES and attitudes toward redistribution was weaker among individuals who more strongly believed that success lies beyond the control of individuals. Shared perceptions of inequality of opportunity at the country level were also significant. The relationship between SES and attitudes toward redistribution was weaker in countries with higher levels of public perceptions of inequality of opportunity. In conclusion, people commensurately support redistribution policies (even contrary to their own self-interest) as they recognize the significance of inequality of opportunity. The greater the support among people for redistribution against their self-interest, the weaker the social cleavage in attitudes toward redistribution across different SES strata, and the higher the overall level of support for redistribution in society.     

Welfare State Changes and Outcomes – The Cases of Portugal and Denmark from a Comparative Perspective

It is well known that welfare states ensure a certain level of social protection affecting levels of well‐being and the extent of inequalities in society. Changes within crucial domains of social policy, such as education, health, or social protection, have, therefore, a major effect upon individuals' opportunities. In this article I compare the effects of these changes in two countries from the mid‐1980s to the financial crisis of 2008. Portugal that was a latecomer in welfare state development and Denmark was at the forefront of de‐commodification and universalization of social rights. The conclusion of this article is that income inequality has been steadily increasing in Danish society; while in Portugal, despite improvements in many social domains (healthcare, poverty alleviation, unemployment protection), problems of inequality remain deeply embedded in the country's social and institutional structures.     

The RSA (Revenu de solidarité active) and back‐to‐work incentives in France

Using an inventory of local and/or non‐statutory transfers (droits connexes) in 13 French towns and cities, the article first measures the gains from returning to work for recipients of national, statutory means‐tested benefits (Revenu minimum d'insertion— RMI, and Allocation parent isolé— API) by type of household before 2009. The reforms of national, statutory benefits carried out during the 2000s, especially those affecting the working tax credit (Prime pour l'emploi— PPE), failed to ensure that the recipients of means‐tested benefits always stood to gain financially from returning to work. The effects of the reforms were offset by the effects of other measures. The article then simulates the effects of the introduction of the Revenu de solidarité active (RSA) in place of the RMI in 2009, and takes into account the way that local and/or non‐statutory transfers are modified by increases in national, statutory transfers. We observe that the RSA eliminates the financial disincentives to returning to work for almost all localities and types of household. The article shows that the marginal tax rate of 38 per cent chosen by the government is very close to the upper limit compatible with a back‐to‐work incentive.     

Trends of Income Inequality Among the Elderly in Korea

This study investigates the overall trend of inequality among the elderly in Korea and to examine what the most influential factor is for these changes. Although inequality among the elderly is far greater than it is for any other group, little attention has been given to how inequality changes over time. Used are data from the Urban Household Survey with five‐year intervals from 1986 to 2006. The results show that inequality within a cohort increases over time and that earnings and benefits from occupational retirement plans are the most influential factors on overall inequality changes. In addition, the impact of public transfers has gradually increased during the past twenty years. The results imply that our society needs to enact a social policy for lessening earnings inequality in the labor market and to increase public transfers for the elderly.     

Do social allowance transfers crowd out private transfers? An analysis of responses among elderly households in Taiwan

Chuang JCC. Do social allowance transfers crowd out private transfers? An analysis of responses among elderly households in Taiwan This article examines whether public transfers ‘crowd out’ private inter‐household transfers in Taiwan, focusing on two old age social allowance schemes (old age allowance and old age farmer allowance) during the 2002–2008 period. This study used a data set from the Survey of Family Income and Expenditure in Taiwan. Empirical evidence suggests that Taiwanese donors are strongly motivated by altruism, and that the increase of public transfers will crowd out private transfers, and vice versa. Besides, altruism is more likely to dominate among poorer elderly recipients, whereas the exchange motive would dominate among richer recipients. Thus, the response of Taiwanese donors is likely to neutralise the distributional impact of public transfers. Finally, the elderly are not a homogenous group, and the effect of public transfers on private transfers varies significantly by household characteristics, in particular depending on age, marital status and living arrangements.     

Prevalence of gambling problems among adolescents in the Nordic countries: an overview of national gambling surveys 1997–2009

Kristiansen S, Jensen SM. Prevalence of gambling problems among adolescents in the Nordic countries: an overview of national gambling surveys 1997–2009 Int J Soc Welfare 2011: 20: 75–86 © 2009 The Author(s), Journal compilation © 2009 Blackwell Publishing Ltd and the International Journal of Social Welfare. The study presents an overview of prevalence studies focusing on problem and pathological gambling among adolescent populations in the Nordic countries. Past‐year prevalence of problem gambling among adolescents in the Nordic countries ranges from 0.4 per cent (Denmark) to 4.2 per cent (Sweden). Past‐year prevalence of pathological gambling ranges from 0.1 per cent (Denmark) to 1.76 per cent (Norway). Results from the Nordic countries also show that boys gamble more than girls, older adolescents gamble more than younger adolescents and that, as shown in adult prevalence surveys, problem gambling is more widespread among adolescents than among adults. It is concluded that investigations of gambling problems among adolescents in the Nordic countries differ regarding age groups, sampling procedures, response rates, nomenclature and screening instruments, all of which complicates valid comparisons. More collaboration between researchers from different countries is urged in order to improve comparability between national studies.     

Lagging behind in good times: immigrants and the increased dependence on social assistance in Sweden

Mood C. Lagging behind in good times: immigrants and the increased dependence on social assistance in Sweden Int J Soc Welfare 2011: 20: 55–65 © 2009 The Author, Journal compilation © 2009 Blackwell Publishing Ltd and the International Journal of Social Welfare. After the 1990s recession in Sweden, social assistance (SA) recipiency decreased to levels that were clearly lower than before the recession. However, this decrease masked a strong polarisation: the number of short‐term recipients fell, but the number of long‐term recipients was higher than before the recession. This article shows how SA recipiency and dependence changed over a whole economic cycle in Sweden's largest city, Stockholm, and asks whether the increasing dependence can be explained by immigration. It is shown that the relative increase of long‐term SA is similar among immigrants and native‐born, but decomposition analysis reveals that the increase among native‐born is of minor importance for the overall increase. Nearly half the increase can be attributed instead to the increased representation of immigrants in the population, and another 38 per cent to increased dependence among immigrants. Only 15 per cent of the total increase in long‐term SA is a result of increased dependence among native‐born.     

Does family still matter? Public and private transfers in emerging welfare state systems in a comparative perspective

Kim JW, Choi YJ. Does family still matter? Public and private transfers in emerging welfare state systems in a comparative perspective Int J Soc Welfare 2011: 20: 353–366 © 2010 The Author(s), International Journal of Social Welfare © 2010 Blackwell Publishing Ltd and the International Journal of Social Welfare. While the role of the family has been a distinctive feature of East Asian welfare systems, rapid social policy development and reforms in South Korea and Taiwan over the last two decades have led to an increase in public welfare. Yet, despite a growing number of studies, little is known about the role of family support – private transfers – and public programmes in the performance of state welfare. This article reports on a comparative analysis of the role of public and private transfers aimed at poverty and inequality reduction in 12 Western and two East Asian states employing the Luxemburg Income Study data set. Results indicate that, in contrast to the West, private transfers that rest primarily on family support remain more important than public transfers in reducing income inequality and poverty in South Korea and Taiwan.     

Little cash to large households: Cash transfers and children's care in disadvantaged families in Ghana

Social protection is widely considered to have a positive effect on children, including supporting improvements in nutritional, educational and health outcomes. Much less is known, however, about the impact of interventions on children's care. This article considers the impact of a social cash transfer targeted at poor households – Ghana's Livelihood Empowerment Against Poverty (LEAP) programme – on child well‐being, quality of care and preventing children's separation from their parents as perceived by programme and non‐programme beneficiaries in a context of vulnerability, large households and widespread informal kinship care. Findings suggest that cash transfers can improve both material and non‐material aspects of well‐being and contribute to the quality of care and have the potential to prevent children's separation from their parents. At the same time, not all children appear to benefit equally, with non‐biological children being disadvantaged. The combination of large household sizes with programme design and implementation challenges, including low transfer amounts, a cap on the maximum number of eligible household members and poor sensitization and follow‐up, undermine the positive role that cash transfers can play.     

Aiming to keep poor Mexican families at the breadline (but no higher): The effects of minimum wage,tax, and social policy changes between 1994 and 2012

Welfare policy in Mexico has been transformed in recent decades. During the years of the import‐substitution industrialization economic strategy and the hegemonic party political regime, social policy was based on social insurance programs of limited coverage to urban formal sector workers and their families. In the mid‐1990s, an unprecedented expansion of social protection through social assistance programs was triggered, along with social insurance reform. This article assesses the effects at the household level of social policy changes, in combination with changes in taxes and the minimum wage, which also impact the welfare of the population. The research applies “model families” to establish effects of social, tax, and minimum wage policy changes across population groups, and their combined potential to combat poverty. Findings show that although taxation and social policy changes increased redistribution towards poor families, their capacity to lift and keep them above poverty thresholds was limited by the drop in the real value of the minimum wage and by strict targeting mechanisms, which exclude families that do not meet eligibility criteria but still fall below poverty lines. Social policy expansion merely subsidized the drop in real minimum wage, and poor families at best remained at similar income levels. Hence, the logic of the design of welfare policy changes can be characterized as aiming to keep poor families on the breadline, but no higher.