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Public Transfers to the Poor: Is Europe really more Generous than the United States?

Author

Listed:
  • M. Dolores Collado

    (Universidad de Alicante)

  • Iñigo Iturbe Ormaetxe

    (Universidad de Alicante)

Abstract
Fighting poverty is one of the main goals in the most societies. This is usually done by the transferring resources to the poor. There exists a widespread view that the European countries are more generous to the poor than the United States. We study whether this is really the case. Firts we review the evidence on aggregate spending and we do not find convincing support for that view. Secondly, we analyze microeconomic evidence from the Current Population Survey and the European Community Household Panel and find mixed results. In particular, when we use the concept of relative poverty, we find that average transfers per poor person in the United States are 54% higher than in the European Union. When we exclude the old from the sample, this difference reduces to 20%.

Suggested Citation

  • M. Dolores Collado & Iñigo Iturbe Ormaetxe, 2008. "Public Transfers to the Poor: Is Europe really more Generous than the United States?," Working Papers. Serie AD 2008-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2008-05
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2008-05.pdf
    File Function: Fisrt version / Primera version, 2008
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    References listed on IDEAS

    as
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    4. Hilary W. Hoynes & Marianne E. Page & Ann Huff Stevens, 2006. "Poverty in America: Trends and Explanations," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 47-68, Winter.
    5. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't the United States Have a European-Style Welfare State?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(2), pages 187-278.
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    8. Martin Feldstein, 1998. "Income Inequality and Poverty," NBER Working Papers 6770, National Bureau of Economic Research, Inc.
    9. Timothy Smeeding, 2006. "Poor People in Rich Nations: The United States in Comparative Perspective," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 69-90, Winter.
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    2. Marisa Hidalgo Hidalgo, 2009. "Tracking can be more equitable than mixing: peer effects and college attendance," Working Papers 09.04, Universidad Pablo de Olavide, Department of Economics, revised Jul 2012.

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    More about this item

    Keywords

    Poverty; Public Transfers; Redistribution; Welfare State;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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