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A unified approach for measuring welfare protection under a decentralized framework

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  • Luis Ayala

    () (Universidad Rey Juan Carlos, Spain)

  • Elena Bárcena-Martín

    () (Universidad de Málaga, Spain)

Abstract

The existing literature on welfare decentralization has not produced a robust set of measures and properties, and no consensus has emerged on how differences in the protection provided by territorial programs should be aggregated into a composite index. The measurement of the level of protection provided by decentralized minimum income programs has often focused on one of two dimensions: adequacy or coverage. The rankings of regions in terms of the protection provided can be very different depending on the chosen outcome. In this paper, we introduce several properties that should be taken into account when measuring these differences. Based on social welfare functions, we propose a parameterized family of indices that satisfy those properties and combine both dimensions. Our empirical illustration using Spanish data confirms that focusing only on standard measures of adequacy may introduce an important bias, making it difficult to properly identify real differences in terms of social welfare among programs in different jurisdictions.

Suggested Citation

  • Luis Ayala & Elena Bárcena-Martín, 2016. "A unified approach for measuring welfare protection under a decentralized framework," Working Papers 405, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2016-405
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2016-405.pdf
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    References listed on IDEAS

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    1. Foster, James E & Shorrocks, Anthony F, 1991. "Subgroup Consistent Poverty Indices," Econometrica, Econometric Society, vol. 59(3), pages 687-709, May.
    2. repec:hpe:journl:y:2017:v:220:i:1:p:107-136 is not listed on IDEAS
    3. Chernick, Howard, 2000. "Federal Grants and Social Welfare Spending: Do State Responses Matter?," National Tax Journal, National Tax Association, vol. 53(n. 1), pages 143-52, March.
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    5. Olivier Bargain & Herwig Immervoll & Heikki Viitamäki, 2012. "No claim, no pain. Measuring the non-take-up of social assistance using register data," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(3), pages 375-395, September.
    6. Howard Chernick, 1998. "Fiscal Effects of Block Grants for the Needy: An Interpretation of the Evidence," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(2), pages 205-233, May.
    7. Dahlberg, Matz & Edmark, Karin, 2008. "Is there a "race-to-the-bottom" in the setting of welfare benefit levels? Evidence from a policy intervention," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1193-1209, June.
    8. Chernick, Howard, 2000. "Federal Grants and Social Welfare Spending: Do State Responses Matter?," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(1), pages 143-152, March.
    9. Baicker, Katherine, 2005. "The spillover effects of state spending," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 529-544, February.
    10. Katherine Baicker, 2005. "Extensive or Intensive Generosity? The Price and Income Effects of Federal Grants," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 371-384, May.
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    Keywords

    welfare generosity; minimum income; social welfare; adequacy.;

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