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The efficiency of expenditure-related redistributive policies in the European countries

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  • Cosmin Eugen ENACHE

    (Faculty of Economics and Business Administration, West University of Timisoara, Romania)

Abstract

For the sample of European Union countries, the efficiency of social protection public expenditures in providing income support and diminishing income inequality is assessed using a two-step Data Envelopment Analysis. This paper adds to the literature in three ways. First, for each country, efficiency scores are derived using an input-oriented variable returns to scale model. As expected, the least efficient redistributive policies were found for countries with generous welfare systems. Second, the efficiency scores are calculated for two periods, before and after the recent economic crisis. The results obtained in this stage of the analysis highlighted the negative impact of the crisis on social protection public expenditure efficiency. Third, other non-discretionary determinants of social protection public expenditures were highlighted as well, using a censored normal Tobit estimation and an additional OLS estimation. The results were robust to the method of estimation and pointed out that higher efficiency scores are associated with higher employment rates and lower dependency ratios.

Suggested Citation

  • Cosmin Eugen ENACHE, 2012. "The efficiency of expenditure-related redistributive policies in the European countries," Timisoara Journal of Economics, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 5(18), pages 380-394.
  • Handle: RePEc:wun:journl:tje:v05:y2012:i18:a10
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    References listed on IDEAS

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    Cited by:

    1. Simona-Gabriela Masca, 2014. "Efficiency of Public Expenditure: Review and Preliminary Results for Romania," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(8), pages 326-345, August.

    More about this item

    Keywords

    Social Security Public Expenditure; Income Inequality; Data Envelopment Analysis;

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models

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