Social Benefits and Income Inequality: Denmark, Sweden, France, Germany, Greece, Spain, the United Kingdom, and the United States

This study examines how the receipt and amount of non-pension public social benefits are associated with two complementary household-level inequality outcomes: GAPIIpre, a Gini-admissible personal inequality index (GAPII) calculated from equivalized household income excluding the measured benefits, and GAPIIpost, the corresponding index calculated from equivalized total household income including them. The analysis uses Luxembourg Income Study microdata for Denmark, Sweden, France, Germany, Greece, Spain, the United Kingdom, and the United States, employing country-specific OLS and quantile regressions to estimate the relationships of interest. At the conditional mean, both social-support measures are negatively associated with GAPIIpre and GAPIIpost in seven countries, whereas Sweden displays positive associations. The quantile estimates reveal substantial differences between the pre- and post-support outcomes. Denmark and France exhibit comparatively stable negative patterns, while Germany, Greece, Spain, the United Kingdom, Sweden, and the United States show changes in sign, significance, or distributional coverage after social benefits are included in household income. The findings demonstrate that benefit receipt is associated both with households’ initial inequality positions and with their observed positions after support. The results support cross-country and distributional heterogeneity but do not establish a simple welfare-regime ordering.