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GINI DP 82: The paradox of redistribution revisited: and that it may rest in peace?

  • Ive Marx


    (Centre for Social Policy, University of Antwerp)

  • Lina Salanauskaite


  • Gerlinde Verbist

    (Centre for Social Policy, University of Antwerp)

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    There is a long-standing controversy in the academic literature over the question of whether targeting benefits towards the bottom part of the income distribution actually enhances or weakens their redistributive impact. Korpi and Palme have influentially claimed that “the more we target benefits at the poor, the less likely we are to reduce poverty and inequality”. The basic empirical underpinning of this claim is a strong inverse relationship at the country level between social transfer targeting and redistributive impact. This paper shows that this key finding no longer holds as a robust empirical generalisation. The relationship between the extent of targeting and redistributive impact over a broad set of empirical specifications, country selections and data sources has in fact become a very weak one, suggesting that the extent of targeting per se may not matter anymore as much as we have assumed since Korpi and Palme.

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    Paper provided by AIAS, Amsterdam Institute for Advanced Labour Studies in its series GINI Discussion Papers with number 82.

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    Date of creation: Aug 2013
    Date of revision:
    Handle: RePEc:aia:ginidp:82
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    1. Sean Corcoran & William N. Evans, 2010. "Income Inequality, the Median Voter, and the Support for Public Education," NBER Working Papers 16097, National Bureau of Economic Research, Inc.
    2. Erling Barth & Karl O. Moene, 2009. "The Equality Multiplier," NBER Working Papers 15076, National Bureau of Economic Research, Inc.
    3. Rainald Borck, 2005. "Voting, Inequality, and Redistribution," Discussion Papers of DIW Berlin 503, DIW Berlin, German Institute for Economic Research.
    4. L. Randall Wray & Stephanie Bell, 2004. "Introduction," Chapters, in: Credit and State Theories of Money, chapter 1 Edward Elgar.
    5. David Brady & Rebekah Burroway, 2012. "Targeting, Universalism, and Single-Mother Poverty: A Multilevel Analysis Across 18 Affluent Democracies," Demography, Springer, vol. 49(2), pages 719-746, May.
    6. Eichhorst, Werner & Konle-Seidl, Regina, 2008. "Contingent Convergence: A Comparative Analysis of Activation Policies," IZA Discussion Papers 3905, Institute for the Study of Labor (IZA).
    7. Eichhorst, Werner & Gerard, Maarten & Kendzia, Michael J. & Mayrhuber, Christine & Nielsen, Conny & Rünstler, Gerhard & Url, Thomas, 2011. "Report No. 42: Pension Systems in the EU – Contingent Liabilities and Assets in the Public and Private Sector," IZA Research Reports 42, Institute for the Study of Labor (IZA).
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