Friday, August 06, 2010

Is the Welfare State Larger in America than in Europe?

Apparently, and by a considerable amount, according to a new article in International Tax and Public Finance (I couldn't find an ungated copy). I haven't read it, but here is the abstract:
Fighting poverty is an important concern in most societies. This usually involves transferring resources to the poor. There exists a widespread view that European countries are much more generous to the poor than the United States. We study whether this is really the case. First, we argue that using data on aggregate spending does not allow us to conclude who the final recipients of social expenditure are. We then analyze microeconomic evidence from the Current Population Survey and the European Community Household Panel and find mixed results. In particular, when the concept of relative poverty is used, we find that every individual below the poverty line receives an average transfer in the United States that is 45% higher than in the European Union. When the old are excluded from the sample, this difference is reduced to 14%.

1 comment:

liberty said...

I would love to read the paper--I do find it a bit hard to believe that "when the concept of relative poverty is used, we find that every individual below the poverty line receives an average transfer in the United States that is 45% higher than in the European Union" -- every?? Really??

For example, the man on the dole in the UK, with no income of his own, who gets housing benefit of £150/week, £100/week of spending money, along with the NHS, free legal advice whenever he needs it, job training if he wants, free or very cheap college, etc etc is getting *less* from the government than the equivalent guy in the US???

Even with all the tax credits, and with Medicaid, TANF, WIC, etc. I very much doubt that the US man is getting anywhere near as much.