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Impulse and time persistence of disaggregate welfare expenditure on growth in the EU

Author

Listed:
  • Alessandro Crociata

    (Gran Sasso Science Institute (GSSI))

  • Massimiliano Agovino

    (University of Naples “Parthenope”)

  • Donatella Furia

    (University “G. D’Annunzio” of Chieti-Pescara)

  • Giacomo Osmi

    (University “G. D’Annunzio” of Chieti-Pescara)

  • Nicola Mattoscio

    (University of Naples “Parthenope”)

  • Massimiliano Cerciello

    (University of Naples “Parthenope”)

Abstract

In a post-industrial and globalised world, assessing the impact of Welfare State Expenditure (WSE) on economic growth has become an issue of growing interest. The debate is still open in the literature, as no consensus has currently been achieved. We argue that disaggregating WSE, the positive/negative performance dichotomy of welfare policies may be overcome. Departing from this intuition, we apply PVAR techniques in order to investigate the endogenous interactions between economic growth (proxied by GDP) and WSE, measured as single social expenditure items, using data gathered from the European System of Integrated Social Protection Statistics. Our results confirm both the positive and the negative impact of WSE on growth. Moreover, we show the existence of the different impulse responses and time persistence patterns for disaggregated WSE items. Our results imply that further research should take into account the composition of WSE in addition to its extent.

Suggested Citation

  • Alessandro Crociata & Massimiliano Agovino & Donatella Furia & Giacomo Osmi & Nicola Mattoscio & Massimiliano Cerciello, 2020. "Impulse and time persistence of disaggregate welfare expenditure on growth in the EU," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(1), pages 13-38, April.
    • Handle: RePEc:spr:epolit:v:37:y:2020:i:1:d:10.1007_s40888-019-00156-6
    DOI: 10.1007/s40888-019-00156-6
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    More about this item

    Keywords

    Welfare state; Disaggregated social spending; Growth; PVAR techniques; Impulse response; Time persistence;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • H1 - Public Economics - - Structure and Scope of Government
    • I2 - Health, Education, and Welfare - - Education
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs

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