In this article, we study how social expenditure is related to poverty, income inequality and GDP growth. Our main contribution is to disentangle these relationships by the following social expenditure schemes: 1) “old age and
survivors”, 2) “incapacity”, 3) “health”, 4) “family”, 5) “unemployment and active labour market policies” and
6) “housing and others”. For this purpose, we employ OLS and 2SLS regression models using a panel data set for
22 Member States of the European Union from 1990 until 2015. We find total public social expenditure to be negatively related to poverty and inequality, but not related to GDP growth. The results vary substantially between the different social expenditure schemes, which makes more accurate targeting possible.
SOURCE: Emile Cammeraat. “The relationship between different social expenditure schemes and poverty, inequality and economic growth.” International Social Security Review, Vol. 73, 2020.
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