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The redistributive impact of public and private social expenditure

  • Goudswaard, Kees
  • Caminada, Koen

Most analyses of social protection are focussed on public arrangements. However, social effort is not restricted to the public domain; all kinds of private arrangements can be substitutes to public programs. In fact, in several countries there has been a shift from public towards private social arrangements. OECD-data indicate that accounting for private social benefits has an equalising effect on levels of social effort across a number of countries. This suggests that public and private social expenditures are complementary to some extent. But their distributional effects differ. In all OECD countries, the social protection system causes a more equal distribution of incomes. Indeed, using cross-country data, we find a negative relationship between public social expenditures and income inequality and a positive relationship between public social expenditure and income redistribution. But we do not find a significant positive relationship between private social expenditures and income inequality or income redistribution. Consequently, changes in the public/private-mix in the provision of social protection may affect the redistributive impact of the welfare state.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 20178.

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Date of creation: 2008
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Handle: RePEc:pra:mprapa:20178
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  1. Anthony B. Atkinson, 2000. "The Changing Distribution of Income: Evidence and Explanations," German Economic Review, Verein für Socialpolitik, vol. 1(1), pages 3-18, 02.
  2. GOUYETTE, Claudine & PESTIEAU, Pierre, . "Efficiency of the welfare state," CORE Discussion Papers RP -1427, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Gottschalk, Peter & Smeeding, Timothy M., 2000. "Empirical evidence on income inequality in industrialized countries," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 5, pages 261-307 Elsevier.
  4. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
  5. Andrea Brandolini & Timothy M. Smeeding, 2007. "Inequality Patterns in Western-Type Democracies: Cross-Country Differences and Time Changes," CHILD Working Papers wp08_07, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  6. Caminada, Koen & Goudswaard, Kees, 2001. "International trends in income inequality and social policy," MPRA Paper 20181, University Library of Munich, Germany.
  7. Caminada, Koen & Goudswaard, Kees, 2004. "Are public and private social expenditures complementary?," MPRA Paper 20179, University Library of Munich, Germany.
  8. Willem Adema, 2001. "Net Social Expenditure: 2nd Edition," OECD Labour Market and Social Policy Occasional Papers 52, OECD Publishing.
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