Social income transfers and poverty: A cross‐country analysis for OECD countries

Caminada K, Goudswaard K, Koster F. Social income transfers and poverty: a cross‐country analysis for OECD countries Poverty alleviation is an important policy objective in developed welfare states. This article reports on a study of the association between social transfer policies and poverty. It has been claimed in several studies that based on a simple bivariate approach, high social effort goes along with low poverty levels. Empirical studies have also found that factors such as demographic and economic conditions may also have an influence on poverty, affecting the relationship between social spending and poverty. In the present study, we empirically analysed the impact of social expenditure on poverty for the period 1985–2005, and in contrast to previous research, demographic and macroeconomic differences across countries were controlled for. Quite a strong negative relationship was still found between the level of social expenditure and poverty. Ageing and unemployment rates were found to have some explanatory power but without affecting the association between social transfers and poverty. Thus, the multivariate approach chosen in this study confirms the results of earlier research.     

On the convergence of social protection systems in the European Union

Member States of the European Union are autonomous when it comes to the design of their social protection systems. However, they are committed by a recommendation accepted by the European Council addressing the convergence of social protection objectives and policies. Besides, convergence of social protection systems is expected to come about as a result of economic integration. In this paper we examine whether such convergence has occurred during the past decades, using data on replacement rates and social expenditure ratios. We find a rather strong trend of relative convergence and, only during the past two decades, an absolute convergence of social indicators in the EU. But there are only weak signs that these trends are the result of European integration.