The relationship between poverty reduction and differing levels of welfare expense as a percentage of GDP[1]
Studies have shown that in welfare states, poverty decreases after countries adopt welfare programs.[2] Empirical evidence suggests that taxes and transfers considerably reduce poverty in most countries whose welfare states commonly constitute at least a fifth of GDP.[3][4][5][6][7][8] In 2013, the Organisation for Economic Co-operation and Development asserted that welfare spending is vital in reducing the ever-expanding global wealth gap.[9]
Timothy Smeeding used data from the Luxembourg Income Study to determine the effectiveness of anti-poverty and welfare programs on poverty reduction. The data for all the countries was from the year 2000 with the exception of the United Kingdom and the Netherlands for which the data was from 1999.[1]
Country
Social expenditures on non-elderly[1][Notes 1] (as percentage of GDP)
The absolute poverty rates of various countries before and after their introduction of welfare[2]The relative poverty rates before and after the introduction of welfare of various countries[4]
Two studies compare countries internationally before and after implementing social welfare programs. Using data from the Luxembourg Income Study, Bradley et al. and Lane Kenworthy measure the poverty rates both in relative terms (poverty defined by the respective governments) and absolute terms (poverty defined by 40% of United States median income), respectively. Kenworthy's study also adjusts for economic performance and shows that the economy made no significant difference in uplifting people out of poverty.
The studies look at the different countries from 1960 to 1991 (Kenworthy) and from 1970 to 1997 (Bradley et al.). Both these periods are roughly when major welfare programs were implemented such as the War on Poverty in the United States. The results of both studies show that poverty has been significantly reduced during the periods when major welfare programs were created.
Country
Absolute poverty rate (1960–1991) (threshold set at 40% of United States median household income)[2]
Conservative groups such as The Heritage Foundation[15] argue that welfare creates dependence, a disincentive to work and reduces the opportunity of individuals to manage their own lives.[16] This dependence is called a "culture of poverty", which is said to undermine people from finding meaningful work.[17] Many of these groups also point to the large budget used to maintain these programs and assert that it is wasteful.[15]
In the book Losing Ground, Charles Murray argues that welfare not only increases poverty, but also increases other problems such as single-parent households, and crime.[18]
Some socialists and Marxists argue that welfare states and modern social democratic policies limit the incentive system of the market by providing things such as minimum wages, unemployment insurance, taxing profits and reducing the reserve army of labor, resulting in capitalists having little incentive to invest. In essence, social welfare policies cripple the capitalist system and increase poverty. By implementing public or cooperative ownership of the means of production, some socialists believe there will be no need for a welfare state.[19][20]
Critics of welfare claim that too little of the transferred income actually reaches poor people, that the safety net welfare provides creates a "poverty trap" by reducing the initiative of poor people, and that welfare weakens the economy.[2]
In 2013, a NBC News/Wall Street Journal poll found that a plurality of Americans (24 percent) said "too much government welfare that prevents initiative" was the leading cause of poverty.[22]
A January 2014 Pew Research poll found that 49% of Americans believe government aid to the poor does more good than harm as people can not escape poverty until basic needs are met and 54% believe taxes should be increased on the wealthy and corporations to expand anti-poverty programs.[23]
Poverty's effect on welfareEdit
While the effect of social welfare on poverty has been documented across both quantitative and qualitative studies, consideration of reciprocal causality is important in understanding the extent to which welfare can address poverty.
^This includes cash and near-cash spending (such as TANF and food stamps) and spending for public housing. It excludes healthcare and education spending.
ReferencesEdit
^ abcdeSmeeding, Timothy (2006). Poor People in Rich Nations: The United States in Comparative Perspective. Table 4, "The Antipoverty Effect of Government Spending: Percent of All Persons Poor". Journal of Economic Perspectives—Volume 20, Number 1—Winter 2006 —Pp. 69 –90.
^ abcdKenworthy, L. (1999). Do social-welfare policies reduce poverty? A cross-national assessment. Social Forces, 77(3), 1119–39.
^Woolf, Steven; Aaron, Laudon. "U.S. Health in International Perspective". National Research Council and Institute of Medicine. pp. 171–72. Retrieved April 8, 2013.
^ abcBradley, D.; Huber, E.; Moller, S.; Nielson, F.; Stephens, J. D. (2003). "Determinants of Relative Poverty in Advanced Capitalist Democracies". American Sociological Review. 68 (3): 22–51. doi:10.2307/3088901. JSTOR 3088901.
^Kevin Drum (26 September 2013). We Can Reduce Poverty If We Want To. We Just Have To Want To. Mother Jones. Retrieved 28 September 2013.
^Gould, Elise and Wething, Hilary (24 July 2012). "U.S. poverty rates higher, safety net weaker than in peer countries." Economic Policy Institute. Retrieved 26 July 2013.
^Zachary A. Goldfarb (9 December 2013). Study: U.S. poverty rate decreased over past half-century thanks to safety-net programs. The Washington Post. Retrieved 15 January 2015.
^Wolff, Richard D. (15 April 2013). A New Political Strategy. Democracy at Work. Retrieved 28 July 2013. "...the best solutions to pressing social problems lie in going well beyond the state and welfare ("socialist") reforms of the past in the precise sense of changing the organization of enterprises, democratizing them into WSDEs (workers' self-directed enterprises)."
^Borjas, George J. (November 22, 2015). "Does welfare reduce poverty?" (PDF). Research in Economics.
^"Poll: Americans blame ‘government welfare’ for poverty," msnbc.com
^Most See Inequality Growing, but Partisans Differ over Solutions. Pew Research Center, 23 January 2014. Retrieved 26 January 2014.
October 23, 2023
welfare, effect, poverty, effects, social, welfare, poverty, have, been, subject, various, studies, relationship, between, poverty, reduction, differing, levels, welfare, expense, percentage, studies, have, shown, that, welfare, states, poverty, decreases, aft. The effects of social welfare on poverty have been the subject of various studies 1 The relationship between poverty reduction and differing levels of welfare expense as a percentage of GDP 1 Studies have shown that in welfare states poverty decreases after countries adopt welfare programs 2 Empirical evidence suggests that taxes and transfers considerably reduce poverty in most countries whose welfare states commonly constitute at least a fifth of GDP 3 4 5 6 7 8 In 2013 the Organisation for Economic Co operation and Development asserted that welfare spending is vital in reducing the ever expanding global wealth gap 9 Contents 1 Table of effect 1 1 Table of poverty levels pre and post welfare 2 Opponents of welfare reducing poverty 3 Public opinion 4 Poverty s effect on welfare 5 See also 6 Notes 7 ReferencesTable of effect Edit nbsp Countries income inequality as of 2018 according to their Gini coefficients 10 nbsp World map indicating the Human Development Index in 2015Timothy Smeeding used data from the Luxembourg Income Study to determine the effectiveness of anti poverty and welfare programs on poverty reduction The data for all the countries was from the year 2000 with the exception of the United Kingdom and the Netherlands for which the data was from 1999 1 Country Social expenditures on non elderly 1 Notes 1 as percentage of GDP Total percent ofpoverty reduced 1 nbsp United States 2 3 26 4 nbsp Netherlands 9 6 65 2 nbsp Sweden 11 6 77 4 nbsp Germany 7 3 70 5 nbsp Canada 5 8 46 0 nbsp Finland 10 9 69 7 nbsp United Kingdom 7 1 60 1 nbsp Belgium 9 3 76 9 nbsp Austria 7 4 75 8 nbsp Italy 4 3 57 7 nbsp Ireland 5 5 44 1Average 7 4 60 9Table of poverty levels pre and post welfare Edit nbsp The absolute poverty rates of various countries before and after their introduction of welfare 2 nbsp The relative poverty rates before and after the introduction of welfare of various countries 4 Two studies compare countries internationally before and after implementing social welfare programs Using data from the Luxembourg Income Study Bradley et al and Lane Kenworthy measure the poverty rates both in relative terms poverty defined by the respective governments and absolute terms poverty defined by 40 of United States median income respectively Kenworthy s study also adjusts for economic performance and shows that the economy made no significant difference in uplifting people out of poverty The studies look at the different countries from 1960 to 1991 Kenworthy and from 1970 to 1997 Bradley et al Both these periods are roughly when major welfare programs were implemented such as the War on Poverty in the United States The results of both studies show that poverty has been significantly reduced during the periods when major welfare programs were created Country Absolute poverty rate 1960 1991 threshold set at 40 of United States median household income 2 Relative poverty rate 1970 1997 4 Pre welfare Post welfare Pre welfare Post welfare nbsp Sweden 23 7 5 8 14 8 4 8 nbsp Norway 9 2 1 7 12 4 4 0 nbsp Netherlands 22 1 7 3 18 5 11 5 nbsp Finland 11 9 3 7 12 4 3 1 nbsp Denmark 26 4 5 9 17 4 4 8 nbsp Germany 15 2 4 3 9 7 5 1 nbsp Switzerland 12 5 3 8 10 9 9 1 nbsp Canada 22 5 6 5 17 1 11 9 nbsp France 36 1 9 8 21 8 6 1 nbsp Belgium 26 8 6 0 19 5 4 1 nbsp Australia 23 3 11 9 16 2 9 2 nbsp United Kingdom 16 8 8 7 16 4 8 2 nbsp United States 21 0 11 7 17 2 15 1 nbsp Italy 30 7 14 3 19 7 9 1Opponents of welfare reducing poverty EditSee also Welfare culture and Category Criticisms of welfare nbsp Decline in American welfare benefits since 1962 in 2006 dollars 11 In the United States some members of both the Republican Party 12 and Democratic Party 13 as well as third parties such as the Libertarian Party 14 have favored reducing or eliminating welfare The landmark piece of legislation which reduced welfare was the Personal Responsibility and Work Opportunity Act under the Clinton administration Conservative groups such as The Heritage Foundation 15 argue that welfare creates dependence a disincentive to work and reduces the opportunity of individuals to manage their own lives 16 This dependence is called a culture of poverty which is said to undermine people from finding meaningful work 17 Many of these groups also point to the large budget used to maintain these programs and assert that it is wasteful 15 In the book Losing Ground Charles Murray argues that welfare not only increases poverty but also increases other problems such as single parent households and crime 18 Some socialists and Marxists argue that welfare states and modern social democratic policies limit the incentive system of the market by providing things such as minimum wages unemployment insurance taxing profits and reducing the reserve army of labor resulting in capitalists having little incentive to invest In essence social welfare policies cripple the capitalist system and increase poverty By implementing public or cooperative ownership of the means of production some socialists believe there will be no need for a welfare state 19 20 Critics of welfare claim that too little of the transferred income actually reaches poor people that the safety net welfare provides creates a poverty trap by reducing the initiative of poor people and that welfare weakens the economy 2 A 2010 study examining the effects of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 found that the act s welfare cutbacks did not increase poverty rates 21 Public opinion EditIn 2013 a NBC News Wall Street Journal poll found that a plurality of Americans 24 percent said too much government welfare that prevents initiative was the leading cause of poverty 22 A January 2014 Pew Research poll found that 49 of Americans believe government aid to the poor does more good than harm as people can not escape poverty until basic needs are met and 54 believe taxes should be increased on the wealthy and corporations to expand anti poverty programs 23 Poverty s effect on welfare EditWhile the effect of social welfare on poverty has been documented across both quantitative and qualitative studies consideration of reciprocal causality is important in understanding the extent to which welfare can address poverty See also EditBasic income Criticisms of welfare Involuntary unemployment Welfare economics Welfare trap Welfare dependencyNotes Edit This includes cash and near cash spending such as TANF and food stamps and spending for public housing It excludes healthcare and education spending References Edit a b c d e Smeeding Timothy 2006 Poor People in Rich Nations The United States in Comparative Perspective Table 4 The Antipoverty Effect of Government Spending Percent of All Persons Poor Journal of Economic Perspectives Volume 20 Number 1 Winter 2006 Pp 69 90 a b c d Kenworthy L 1999 Do social welfare policies reduce poverty A cross national assessment Social Forces 77 3 1119 39 Woolf Steven Aaron Laudon U S Health in International Perspective National Research Council and Institute of Medicine pp 171 72 Retrieved April 8 2013 a b c Bradley D Huber E Moller S Nielson F Stephens J D 2003 Determinants of Relative Poverty in Advanced Capitalist Democracies American Sociological Review 68 3 22 51 doi 10 2307 3088901 JSTOR 3088901 Kevin Drum 26 September 2013 We Can Reduce Poverty If We Want To We Just Have To Want To Mother Jones Retrieved 28 September 2013 Gould Elise and Wething Hilary 24 July 2012 U S poverty rates higher safety net weaker than in peer countries Economic Policy Institute Retrieved 26 July 2013 Zachary A Goldfarb 9 December 2013 Study U S poverty rate decreased over past half century thanks to safety net programs The Washington Post Retrieved 15 January 2015 Kenworthy Lane February 2014 America s Social Democratic Future Foreign Affairs Retrieved 8 February 2014 See also Kenworthy Lane 2014 Social Democratic America Oxford University Press ISBN 0199322511 Wealth Gap Widens In Rich Countries As Austerity Threatens To Worsen Inequality OECD The Huffington Post Retrieved 26 July 2013 GINI index World Bank estimate Data data worldbank org Retrieved 2020 07 23 2008 Indicators of Welfare Dependence Figure TANF 2 Republican Party on Welfare amp Poverty On The Issues Democratic Party on Welfare amp Poverty On The Issues Issues Poverty and Welfare a b Confronting the Unsustainable Growth of Welfare Entitlements Principles of Reform and the Next Steps The Heritage Foundation Tanner Michael 2008 Welfare State In Hamowy Ronald ed The Encyclopedia of Libertarianism Thousand Oaks CA SAGE Cato Institute pp 540 42 doi 10 4135 9781412965811 n327 ISBN 978 1 4129 6580 4 LCCN 2008009151 OCLC 750831024 Niskanen A Welfare and the Culture of PovertyThe Cato Journal Vol 16 No 1 Murray Charles 1984 Losing Ground American Social Policy 1950 1980 Basic Books pp 58 125 115 Encyclopedia of Marxism Glossary of Terms Wolff Richard D 15 April 2013 A New Political Strategy Democracy at Work Retrieved 28 July 2013 the best solutions to pressing social problems lie in going well beyond the state and welfare socialist reforms of the past in the precise sense of changing the organization of enterprises democratizing them into WSDEs workers self directed enterprises Borjas George J November 22 2015 Does welfare reduce poverty PDF Research in Economics Poll Americans blame government welfare for poverty msnbc com Most See Inequality Growing but Partisans Differ over Solutions Pew Research Center 23 January 2014 Retrieved 26 January 2014 Retrieved from https en wikipedia org w index php title Welfare 27s effect on poverty amp oldid 1176860549, wikipedia, wiki, book, books, library,
