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The Redistributive Impact of Public and Private Social Expenditure


Kees Goudswaard


Leiden Law School - Department of Economics

Koen Caminada


Leiden Law School - Department of Economics

2008

Leiden University, Department of Economics Research Memorandum No. 2008.04

Abstract:     
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.

Number of Pages in PDF File: 23

Keywords: Social Protection, Private Social Expenditure, Income Distribution

JEL Classification: D3, H22, H55

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Date posted: July 16, 2009  

Suggested Citation

Goudswaard, Kees and Caminada, Koen, The Redistributive Impact of Public and Private Social Expenditure (2008). Leiden University, Department of Economics Research Memorandum No. 2008.04. Available at SSRN: http://ssrn.com/abstract=1434861 or http://dx.doi.org/10.2139/ssrn.1434861

Contact Information

Kees Goudswaard
Leiden Law School - Department of Economics ( email )
P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands
Koen Caminada (Contact Author)
Leiden Law School - Department of Economics ( email )
P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands
++31715277858 (Phone)
HOME PAGE: http://www.law.leiden.edu/organisation/taxlawandeconomics/economics/staff/caminada.html
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