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Public Transfers to the Poor: Is Europe really more Generous than the United States?

Author

Listed:
  • M. Dolores Collado

    () (Universidad de Alicante)

  • Iñigo Iturbe Ormaetxe

    () (Universidad de Alicante)

Abstract

Fighting poverty is one of the main goals in the most societies. This is usually done by the transferring resources to the poor. There exists a widespread view that the European countries are more generous to the poor than the United States. We study whether this is really the case. Firts we review the evidence on aggregate spending and we do not find convincing support for that view. Secondly, we analyze microeconomic evidence from the Current Population Survey and the European Community Household Panel and find mixed results. In particular, when we use the concept of relative poverty, we find that average transfers per poor person in the United States are 54% higher than in the European Union. When we exclude the old from the sample, this difference reduces to 20%.

Suggested Citation

  • M. Dolores Collado & Iñigo Iturbe Ormaetxe, 2008. "Public Transfers to the Poor: Is Europe really more Generous than the United States?," Working Papers. Serie AD 2008-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasad:2008-05
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2008-05.pdf
    File Function: Fisrt version / Primera version, 2008
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    References listed on IDEAS

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    1. Oecd, 2006. "Projecting OECD Health and Long-Term Care Expenditures: What Are the Main Drivers?," OECD Economics Department Working Papers 477, OECD Publishing.
    2. Martin Feldstein, 2005. "Rethinking Social Insurance," American Economic Review, American Economic Association, vol. 95(1), pages 1-24, March.
    3. Hilary W. Hoynes & Marianne E. Page & Ann Huff Stevens, 2006. "Poverty in America: Trends and Explanations," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 47-68, Winter.
    4. Robert A. Moffitt, 2003. "Means-Tested Transfer Programs in the United States," NBER Books, National Bureau of Economic Research, Inc, number moff03-1, April.
    5. Martin Feldstein, 1998. "Income Inequality and Poverty," NBER Working Papers 6770, National Bureau of Economic Research, Inc.
    6. Edward R. Whitehouse, 2003. "The Value of Pension Entitlements: A Model of Nine OECD Countries," OECD Social, Employment and Migration Working Papers 9, OECD Publishing.
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    Cited by:

    1. Marisa Hidalgo-Hidalgo, 2011. "On the optimal allocation of students when peer effects are at work: tracking vs. mixing," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 2(1), pages 31-52, March.
    2. Marisa Hidalgo Hidalgo, 2009. "Tracking can be more equitable than mixing: peer effects and college attendance," Working Papers 09.04, Universidad Pablo de Olavide, Department of Economics, revised Jul 2012.

    More about this item

    Keywords

    Poverty; Public Transfers; Redistribution; Welfare State;

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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