IDEAS home Printed from https://ideas.repec.org/p/lis/liswps/233.html
   My bibliography  Save this paper

Do Welfare States Reduce Poverty? A Critical Shortcoming in the Standard Analysis of the Anti-Poverty Effect of Welfare States

Author

Listed:
  • Hwanjoon Kim

Abstract

A standard analysis of the anti-poverty effect of taxes and income transfers is to compare pre-tax-transfer poverty and post-tax-transfer poverty. A critical shortcoming of the standard approach is that it treats pre-tax-transfer poverty as given and ignores potential effects of taxes and transfers on pre-tax-transfer poverty. Using cross-national variation, this study examines potential endogeniety of pre-tax-transfer poverty. The results suggest that both the generosity and efficiency of the tax/transfer system may influence the level of pre-tax-transfer poverty. If this is true, the standard approach overestimates the anti-poverty effectiveness of generous and/or targeted welfare systems.

Suggested Citation

  • Hwanjoon Kim, 2000. "Do Welfare States Reduce Poverty? A Critical Shortcoming in the Standard Analysis of the Anti-Poverty Effect of Welfare States," LIS Working papers 233, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:233
    as

    Download full text from publisher

    File URL: http://www.lisdatacenter.org/wps/liswps/233.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hwanjoon Kim, 2000. "Anti-Poverty Effectiveness of Taxes and Income Transfers in Welfare States," LIS Working papers 228, LIS Cross-National Data Center in Luxembourg.
    2. Gustafsson, Siv, 1992. "Separate Taxation and Married Women's Labor Supply: A Comparison of West Germany and Sweden," Journal of Population Economics, Springer;European Society for Population Economics, vol. 5(1), pages 61-85, February.
    3. repec:bla:econom:v:57:y:1990:i:225:p:119-29 is not listed on IDEAS
    4. Joakim Palme & Walter Korpi, 1998. "The Paradox of Redistribution and Strategies of Equality: Welfare State Institutions, Inequality and Poverty in the Western Countries," LIS Working papers 174, LIS Cross-National Data Center in Luxembourg.
    5. Hsiao, Cheng, 1979. "Causality tests in econometrics," Journal of Economic Dynamics and Control, Elsevier, vol. 1(4), pages 321-346, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Garnett Picot & René Morissette & John Myles, 2003. "Low-Income Intensity During the 1990s: The Role of Economic Growth, Employment Earnings and Social Transfers," Canadian Public Policy, University of Toronto Press, vol. 29(s1), pages 15-40, January.
    2. Chen Wang & Kees Goudswaard & Koen Caminada, 2012. "Disentangling Income Inequality and the Redistributive Effect of Taxes and Transfers in 20 LIS Countries Over Time Evidence from the LIS Data," LIS Working papers 581, LIS Cross-National Data Center in Luxembourg.
    3. Picot, Garnett & Morissette, Rene & Myles, John, 2003. "Low-income Intensity During the 1990s: The Role of Economic Growth, Employment Earnings and Social Transfers," Analytical Studies Branch Research Paper Series 2003172e, Statistics Canada, Analytical Studies Branch.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Koen Caminada & Kees Goudswaard & Chen Wang & Jinxian Wang, 2019. "Income Inequality and Fiscal Redistribution in 31 Countries After the Crisis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(1), pages 119-148, March.
    2. Francois Nielsen & David Bradley & John D. Stephens & Evelyne Huber & Stephanie Moller, 2001. "The Welfare State and Gender Equality," LIS Working papers 279, LIS Cross-National Data Center in Luxembourg.
    3. Lyle Scruggs & James Allan, 2005. "The Material Consequences of Welfare States: Benefit Generosity and Absolute Poverty in 16 OECD Countries," LIS Working papers 409, LIS Cross-National Data Center in Luxembourg.
    4. Gerlinde Verbist & Wim Van Lancker, 2016. "Horizontal and Vertical Equity Objectives of Child Benefit Systems: An Empirical Assessment for European Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(3), pages 1299-1318, September.
    5. Koen Caminada & Kees Goudswaard & Chen Wang & Jinxian Wang, 2021. "Antipoverty Effects of Various Social Transfers and Income Taxes Across Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 154(3), pages 1055-1076, April.
    6. E. Bárcena-Martín & S. Pérez-Moreno, 2017. "Immigrant–native gap in poverty: a cross-national European perspective," Review of Economics of the Household, Springer, vol. 15(4), pages 1105-1136, December.
    7. Francois Nielsen & David Bradley & John D. Stephens & Evelyne Huber & Stephanie Moller, 2001. "The State and Poverty Alleviation in Advanced Capitalist Democracies," LIS Working papers 278, LIS Cross-National Data Center in Luxembourg.
    8. Gamal Atallah, 1998. "Les impôts sur le revenu et l’offre de travail des femmes mariées : une revue de la littérature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 74(1), pages 95-128.
    9. Bruch, Sarah K. & van der Naald, Joseph & Gornick, Janet C., 2022. "Poverty Reduction through Federal and State Policy Mechanisms: Variation Over Time and Across the U.S. States," SocArXiv jz5xp, Center for Open Science.
    10. Mona Sandbæk, 2017. "European Policies to Promote Children’s Rights and Combat Child Poverty," IJERPH, MDPI, vol. 14(8), pages 1-13, July.
    11. Jin Wook Kim & Young Jun Choi, 2008. "Private Transfers and Emerging Welfare States in East Asia: Comparative Perspectives," LIS Working papers 507, LIS Cross-National Data Center in Luxembourg.
    12. Anna Wildowicz-Szumarska, 2022. "Is redistributive policy of EU welfare state effective in tackling income inequality? A panel data analysis," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(1), pages 81-101, March.
    13. Svenja Gärtner, 2013. "German Stagnation vs. Swedish Progression: Gender Wage Gaps in Comparison, 1960-2006," LIS Working papers 586, LIS Cross-National Data Center in Luxembourg.
    14. Andreas Bergh, 2008. "Explaining the Survival of the Swedish Welfare State: Maintaining Political Support Through Incremental Change," Financial Theory and Practice, Institute of Public Finance, vol. 32(3), pages 233-254.
    15. Cristiano Perugini & Gaetano Martino, 2008. "Income Inequality Within European Regions: Determinants And Effects On Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(3), pages 373-406, September.
    16. Lane Kenworthy, 2004. "Welfare States, Real Income and Poverty," LIS Working papers 370, LIS Cross-National Data Center in Luxembourg.
    17. Leena Eklund Karlsson & Anne Leena Ikonen & Kothar Mohammed Alqahtani & Pernille Tanggaard Andersen & Subash Thapa, 2020. "Health Equity Lens Embedded in the Public Health Policies of Saudi Arabia: A Qualitative Document Analysis," SAGE Open, , vol. 10(4), pages 21582440209, October.
    18. Campos, Nauro & Nugent, Jeffrey B, 2000. "Investment and Instability," CEPR Discussion Papers 2609, C.E.P.R. Discussion Papers.
    19. Maggie Ka-Wai Lau & Kee-Lee Chou, 2019. "Targeting, Universalism and Child Poverty in Hong Kong," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 12(1), pages 255-275, February.
    20. Ive Marx & Brian Nolan & Javier Olivera, 2014. "The Welfare State and Anti-Poverty Policy in Rich Countries," Working Papers 1403, Herman Deleeck Centre for Social Policy, University of Antwerp.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lis:liswps:233. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Piotr Paradowski (email available below). General contact details of provider: https://edirc.repec.org/data/lisprlu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.