Advanced Search
MyIDEAS: Login

Market's SINS and the European Welfare State: theory and empirical evidences

Contents:

Author Info

  • Luigi Pierfranco Campiglio

    ()
    (DISCE, Università Cattolica)

Abstract

We analyze the European Welfare State according to a theoretical framawork based on four main social goals – stability, inequality, need, safety (SINS) – which the market mechanism fail to achieve: they are the market’s SINS. We propose a theoretical framework which is based on the distinction between “private goods”, which are the domain of the market, and “common goods”, which are the the domain of the Welfare State and the other lower layers of social institutions. The main result is that a high level of social protection benefits, properly allocated to these goals, can be effective for achieving economic goals, because it allows to amend market’s shortcoming for SINS, while allowing the flexibility for complying with the public budget constraint, given the positive relationship between GDP per-capita and the share of social protection benefits. A cross-section analysis shows that the goals of SINS are better achieved when the social protection benefit focuses on the functions of family and children and sickness and health care, because they are the most poverty reduction: they allow to better achieve the goal of reducing inequality and providing families needs. We show that for the families with children the better working arrangement – which is associated with higher GDP per-capita and lower inequality – is one parent working full time and one parent part-time. We explain the cross-section variability for the functions of pensions, housing and social exclusions in relationship with the goals of stability and and safety. We analysis a sample of seven major European countries for the period 1995-2009, focusing on the goal of economic stability and the degree of procyciclical or countercyclical relationship between social protection expenditures and GDP per-capita. A number of econometric and numerical results are derived: countries with better economic performances can have both procyclical and countercyclical behavior, but they have in common higher value of social protection benefits on the onset of the cyclical downturn or recession: the flexibility for budget adjustment come from the political leeway of the high starting value of social protection and the higher share of in-kind benefits. The GDP per-capita in the year 2000 is a good predictor of the average primary balances for the European countries over the decade.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://istituti.unicatt.it/politica_economica_ISPE0060.pdf
File Function: First version, 2012
Download Restriction: no

Bibliographic Info

Paper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni dell'Istituto di Politica Economica with number ispe0060.

as in new window
Length: 41
Date of creation: Sep 2012
Date of revision:
Handle: RePEc:ctc:serie5:ispe0060

Contact details of provider:
Email:
Web page: http://www.unicatt.it/Istituti/PoliticaEconomica
More information through EDIRC

Related research

Keywords: Welfare State; household income; poverty reduction; economic recession; government budget;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ctc:serie5:ispe0060. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Giuseppina Malerba).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.