A glass ceiling on poverty reduction? An empirical investigation into the structural constraints on minimum income protections

2019 ◽  
Vol 30 (2) ◽  
pp. 129-143 ◽  
Author(s):  
Bea Cantillon ◽  
Zachary Parolin ◽  
Diego Collado
Keyword(s):  
Poverty Reduction ◽  
Empirical Investigation ◽  
Employment Growth ◽  
Welfare States ◽  
Structural Constraints ◽  
Net Income ◽  
Minimum Income ◽  
Downward Pressure ◽  
Wage Earners ◽  
Household Incomes

This article investigates whether declining or sluggish growth in earnings for low-wage workers contributes to declining levels of minimum income protections. Starting from the observation of lacklustre growth in minimum income protections, this article introduces a framework to conceptualize the tensions facing modern welfare states in their attempt to (1) provide poverty-alleviating minimum incomes, (2) achieve employment growth and (3) keep spending levels in check. We argue that, due to downward pressure on low gross wages compared to median household incomes, it has become more difficult to balance each of those three objectives. Estimation results from country-year panel data suggest that declines in minimum wages (or low gross wages) are associated with declines in minimum income protections for the jobless. When growth in minimum income protections does exceed growth in low gross wages, we find that welfare states also increase gross-to-net effort to subsidize the net income of low-wage earners. We argue that these findings point towards a ‘structural inadequacy’ around minimum income protections for the jobless.

Decent Incomes for All

2018 ◽  
Keyword(s):  
Poverty Reduction ◽  
Social Protection ◽  
Social Innovation ◽  
Welfare States ◽  
Structural Constraints ◽  
The European Union ◽  
Minimum Income ◽  
Trade Offs ◽  
The Social ◽  
The Impact

This book aims to shed new light on recent poverty trends in the European Union, responses by European welfare states, and how progress can be made to realize a decent income for all. The text analyzes the effect of social and fiscal policies before, during, and after the recent economic crisis and studies the impact of alternative policy packages on poverty and inequality. Furthermore, the discussion elaborates on how social investment and local initiatives of social innovation can contribute to tackling poverty. There are reasons for both optimism and pessimism. The book argues that there are indeed structural constraints on the increase of the social floor and difficult trade-offs involved in reconciling work and poverty reduction. Differences across countries are, however, very large. This suggests that there is ample room for maneuver for policy makers. There is also no evidence of a universal deterioration of social protection. Nonetheless, we observe a persistent and almost general inadequacy of minimum income protection for jobless households, pointing to structural challenges for realizing a decent minimum income for all. To overcome these challenges, unavoidably, efforts to raise the wage and the social floor should be increased significantly almost everywhere. The book highlights that to do so, country-specific policy mixes should be designed.

The Politics of Minimum Income Protection in the Canadian Provinces

2020 ◽  
Vol 53 (2) ◽  
pp. 399-420 ◽  
Author(s):  
Alain Noël
Keyword(s):  
Poverty Reduction ◽  
Positive Impact ◽  
Social Assistance ◽  
Union Density ◽  
Negative Influence ◽  
Welfare States ◽  
Partisan Politics ◽  
Minimum Income ◽  
Reduction Strategies ◽  
Canadian Provinces

AbstractThis article compares social assistance incomes, or minimum income protection, for four household types in the 10 Canadian provinces between 1990 and 2017 and relates these incomes to a number of factors, including partisan dominance over time, trade union density, the presence or absence of poverty reduction strategies, provincial social expenditures, overall redistribution efforts, debt service costs and social assistance recipiency rates. In line with findings for the Organisation for Economic Co-operation and Development (OECD) welfare states, partisan politics does not play a strong role but, as power resources theory predicts, union density and a province's overall redistribution efforts do. Social assistance recipiency rates, which capture the salience of social assistance incomes in a province, also have a significant, positive impact on welfare incomes, confirming the “welfare paradox” identified by Ivar Lødemel. Poverty reduction strategies, however, do not, and they even have a negative influence on welfare incomes.

scholarly journals Smaller net or just fewer to catch? Disentangling the causes for the varying sizes of minimum income schemes

2021 ◽  
Author(s):  
Jussi Tervola ◽  
Merita Jokela ◽  
Joonas Ollonqvist
Keyword(s):  
Social Assistance ◽  
Welfare States ◽  
Nordic Countries ◽  
Methodological Framework ◽  
Political Will ◽  
Minimum Income ◽  
Weak Evidence

The sizes of minimum income schemes vary significantly even in welfare states that are considered similar. For example among Nordic countries, the share of recipients is almost double in Finland compared to Nordic peers. Considering the strong political will to diminish the receipt of last-resort benefits, we demonstrate a methodological framework to evaluate the reasons for varying number of beneficiaries and apply it to two Nordic countries, Finland and Sweden. By using microsimulation of eligibility rates, we examine the role of social assistance legislation, first-tier benefits and non-take-up. Relatively high number of beneficiaries in Finland is traced back to social assistance policies such as higher norm levels and earning disregard but also to lower non-take-up rate of social assistance benefits, which potentially reflects looser discretion and asset test. We also find some, albeit weak, evidence that the implementation reform of social assistance in Finland 2017 has further reduced non-take-up.

Conclusion

2018 ◽  
pp. 290-305
Author(s):  
Bea Cantillon ◽  
Tim Goedemé ◽  
John Hills
Keyword(s):  
Cost Effectiveness ◽  
Social Exclusion ◽  
Poverty Reduction ◽  
Minimum Income ◽  
Policy Responses ◽  
Trade Offs ◽  
Policy Objectives ◽  
Current Minimum ◽  
The Cost

This final chapter summarizes the main findings of the book and concludes with a discussion of the implications for realizing progress in terms of poverty reduction and guaranteeing a decent minimum income to all. It stresses the inadequacy of current minimum income schemes and highlights trade-offs with other policy objectives. It argues that employment increases by themselves are not enough and that policy choices can make a difference, as they have done in the past. Moreover, the cost-effectiveness of policy responses in reducing poverty varies widely between instruments and countries. However, in any case making progress does not come cheap. If policymakers want to deliver on their promise to substantially reduce poverty and social exclusion in Europe, they will have to improve the adequacy of minimum incomes while maintaining financial work incentives, implying the need to also increase low-wages, either directly through increasing minimum wages, or indirectly, by subsidizing employment or increasing in-work benefits.

But what about that nice house you own? The impact of asset tests in minimum income schemes in Europe: An empirical exploration

2020 ◽  
pp. 095892872097013
Author(s):  
Sarah Marchal ◽  
Sarah Kuypers ◽  
Ive Marx ◽  
Gerlinde Verbist
Keyword(s):  
Household Finance ◽  
Welfare States ◽  
Microsimulation Model ◽  
Anglo Saxon ◽  
Minimum Income ◽  
The Poor ◽  
The Impact ◽  
Consumption Survey ◽  
European Welfare States

Means-tested transfer schemes in Europe and elsewhere tend to include not only income tests but also asset tests of various sorts. The role of asset tests in minimum income protection provisions has been extensively researched in the Anglo-Saxon context. Far fewer authors have assessed the role of asset tests on social policy in a continental European context. Although asset tests may be useful in singling out the more deserving of the poor, we know relatively little of their actual impact on eligibility and social outcomes in European welfare states. This paper looks at the prevalence and design of asset tests in European minimum income protection schemes. We distinguish between two main types of asset tests: outright disqualification when assets reach a certain value, versus a more gradual tapering at a fictional rate of return. We then analyse in greater detail how asset tests in Belgium and Germany, as representatives of these two types, affect minimum income protection eligibility and poverty outcomes. We use the EUROMOD microsimulation model on the Household Finance and Consumption Survey data in order to assess the effects of asset tests. This survey was explicitly designed to more realistically reflect assets and capital incomes.

Investing in subsidized childcare to reduce poverty

2019 ◽  
Vol 30 (3) ◽  
pp. 306-319
Author(s):  
Tine Hufkens ◽  
Francesco Figari ◽  
Dieter Vandelannoote ◽  
Gerlinde Verbist
Keyword(s):  
Young Children ◽  
Poverty Reduction ◽  
Child Poverty ◽  
Welfare States ◽  
Microsimulation Model ◽  
Employment Opportunities ◽  
Subsidized Childcare ◽  
The Government ◽  
The Impact ◽  
European Welfare States

Expanding childcare is often considered as a suitable way to enhance employment opportunities for mothers with young children as well as to reduce child poverty. In this study, the authors critically investigate this assertion by simulating a set of scenarios of increasing subsidized childcare slots and mothers’ employment. For a variety of European welfare states, the impact on poverty and on the government’s budget is estimated using the European microsimulation model EUROMOD. The findings suggest that to achieve significant poverty reductions among young children, both additional childcare slots and increased mothers’ employment should be well targeted. The expenditures for additional childcare slots can to a large extent be recovered by the government receipts generated by the additional employment; however, there appears to be a trade-off between the extra revenue that can be generated and the extent of poverty reduction.

scholarly journals Health inequalities in Europe: Does minimum income protection make a difference?

2019 ◽  
pp. 001139211989065
Author(s):  
Regina Jutz
Keyword(s):  
Health Inequalities ◽  
Multilevel Models ◽  
European Social Survey ◽  
Welfare States ◽  
Social Survey ◽  
Minimum Income ◽  
Income Groups ◽  
The People ◽  
Lower Health ◽  
Individual Self

Poverty, a risk factor for ill health, could be alleviated by generous welfare states. However, do generous social policies also reduce the health implications of socio-economic inequalities? This study investigates how minimum income protection is associated with socio-economic health inequalities. The author hypothesises that higher benefit levels are associated with lower health inequalities between income groups. Minimum income benefits support the people most in need, and therefore should improve the health of the lowest income groups, which in turn would reduce overall health inequalities. This hypothesis is tested with the European Social Survey (2002–2012) and the SaMip dataset using three-level multilevel models, covering 26 countries. The results show a robust relationship between benefit levels and individual self-rated health. However, the hypothesis of reduced health inequalities is not completely supported, since the findings for the cross-level interactions between income quintiles and benefit levels differ for each quintile.

Adequate income in Portugal: a comparison of two estimation methods

2020 ◽  
pp. 271-288
Author(s):  
José A. Pereirinha ◽  
Elvira Pereira ◽  
Francisco Branco ◽  
Dália Costa ◽  
Maria Inês Amaro
Keyword(s):  
Focus Group ◽  
Focus Groups ◽  
Poverty Reduction ◽  
Great Emphasis ◽  
Estimation Methods ◽  
Group Discussions ◽  
Minimum Income ◽  
Food Basket ◽  
The Cost ◽  
Food Budget

This chapter examines the adequate income in Portugal by comparing “Improving Poverty Reduction in Europe” (ImPRovE) and Minimum Income Standards (MIS). It discusses how the MIS approach places great emphasis on the results of the focus group discussions for establishing a consensual income standard for society, while the ImPRovE method puts experts in the driving seat and focus groups are largely confirmatory. It also provides a comparison of MIS and ImPRovE's food budget results. The chapter looks into the cost of the food basket for both a man and a woman, and a couple, that is found to be higher when using the ImPRovE methodology compared to MIS approach. It covers findings that highlight some of the main differences of MIS and ImPRovE in terms of food basket composition or quantities of different groups of food.

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