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Government Social Expenditure and Income Inequalities in the European Union

Author

Listed:
  • Ángeles Sánchez

    (University of Granada)

  • Antonio L. Pérez-Corral

    (University of Valladolid)

Abstract

This paper analyzes the relationship between public social expenditure and income inequality distribution in the 28 Member States of the European Union, throughout the period 2005-2014. We estimate dynamic panel models. The results show the existence of a negative correlation between public social expenditure as a whole and income inequality. Distinguishing among different expenditure concepts, the association between social expenditure and income inequality may be different in the emerging Member States as compared to the rest of the States. In the emerging States, spending on health and spending on social protection are negatively associated with income inequality, and in the rest of States, this redistributive function is carried out only by spending on social protection. Spending on education is not significantly related to income inequality in any group of studied countries.

Suggested Citation

  • Ángeles Sánchez & Antonio L. Pérez-Corral, 2018. "Government Social Expenditure and Income Inequalities in the European Union," Hacienda Pública Española / Review of Public Economics, IEF, vol. 227(4), pages 133-156, December.
    • Handle: RePEc:hpe:journl:y:2018:v:227:i:4:p:133-156
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    More about this item

    Keywords

    Income inequality; government social expenditure; European Union; System GMM;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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