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Are Public and Private Social Expenditures Complementary?

  • Koen Caminada
  • Kees Goudswaard

Most analyses of social protection are focussed on public arrangements. However, social effort is not restricted to the public domain; all kinds of private arrangements can be substitutes to public programs. OECD data indicate that accounting for private social benefits has an equalising effect on levels of social effort across a number of countries. This suggests complementarity between public and private social expenditures. But their distributional effects differ. Using cross-country data, we find a negative relationship between net public social expenditures and income inequality, but a positive relationship between net private social expenditures and income inequality. We conclude that changes in the public/private mix in the provision of social protection may affect the redistributive impact of the welfare state. Copyright International Atlantic Economic Society 2005

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Article provided by International Atlantic Economic Society in its journal International Advances in Economic Research.

Volume (Year): 11 (2005)
Issue (Month): 2 (May)
Pages: 175-189

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Handle: RePEc:kap:iaecre:v:11:y:2005:i:2:p:175-189
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