Government Social Expenditure and Income Inequalities in the European Union

Abstract

This paper analyzes the relationship between public social expenditure and income inequality distribu tion in the 28 Member States of the European Union, throughout the period 2005-2014. We estimate dynamic panel models. The results show the existence of a negative correlation between public social expenditure as a whole and income inequality. Distinguishing among different expenditure concepts, the association between social expenditure and income inequality may be different in the emerging Member States as compared to the rest of the States. In the emerging States, spending on health and spending on social protection are negatively associated with income inequality, and in the rest of States, this redistributive function is carried out only by spending on social protection. Spending on education is not significantly related to income inequality in any group of studied countries.

Public Policies of Welfare State and Child Poverty in the European Union

“…This means that studying public expenditures in conjunction with the tax structureor the relationship between direct and indirect taxes-of the Member States provides a better perspective of analysis [12,32]. According to our results, government spending on education and health could have a greater capacity to reduce child poverty in the Member States with less progressive tax structure.…”

“…The distributive incidence of public spending as well as its relationship with child poverty must be analysed in conjunction with the tax structure, or relationship between direct and indirect taxes, in order to account for how the expenditures are financed [12,32]. Progressive taxation and a better design of social programmes may contribute to a higher degree of efficiency targeted towards the poorest [21].…”

Does Entrepreneurship Affect Income Inequality within Countries? Direct and Indirect Effects in European Countries

“…According to Eurostat, the Gini coefficient (GINI) is understood as the relationship of cumulative shares of the population -arranged according to the level of equivalised disposable income -to the cumulative share of the equivalised total disposable income received by them. The Gini index is believed to be the most informative indicator of social inequality (Sanchez & Perez-Corral, 2018); the greater the indicator, the more unequally the incomes are distributed in a society. The Gini index is also calculated for different countries, which allows researchers to conduct cross-country analysis (Luk'ianchikova & Iamshchikova, 2019).…”

“…The question of inequality was a central topic of nineteenth-century economics, then in the twentieth century these issues became less important, while the past few years witness these matters regain their previous popularity (Mihalyi & Szelenyi, 2017). Recently, the level of inequality in income distribution has been rising in most countries of the world as a consequence of the economic crisis (Sanchez & Perez-Corral, 2018). Failure to reduce economic inequality could cause not only economic problems but also social erosion, which can in turn lead to less willingness of citizens to obey the law, make sacrifices during crises, or pay taxes (Ippolito & Cicatiello, 2019;Malkina, 2019).…”

Implementing a Negative Income Tax. Net Cost, Poverty and Inequality Effects

“…However, the NIT collects 92,178 million and pays benefits of 46,961 (Table 4). This higher spending on social protection is associated with a stronger reduction in inequality (Sánchez and Pérez-Corral, 2018). According to OECD, "Countries which achieved large increases in the redistributive effect of ben-efits did so mainly through growing average benefit amounts, while the degree of benefit targeting ("progressivity") changed less.…”