Effectiveness of poverty reduction in the EU: A descriptive analysis

The European Union coordinates and encourages Member State actions to combat poverty, and to reform their social protection systems on the basis of policy exchanges and mutual learning (‘best practices’). Some EU countries are more effective in poverty reduction than others. What can explain these variations in effectiveness? This paper analyses the effectiveness of welfare state policies and especially social transfers in EU-countries in alleviating poverty. To indicate whether European economic integration may have had any impact on poverty reduction, we also include several non-EU15 countries as a benchmark into our analysis. We analyze on a cross-country basis the relationship between poverty rates and social effort, as measured by social expenditure ratios. We also correct these expenditure ratios for the impact of the tax system and for private social arrangements, using OECD methodology. Next, we compare poverty rates at the levels of market and disposable incomes, that is before and after transfers, in order to analyze the effect of tax and transfer policies in reducing poverty, i.e. to determine the target efficiency of social transfers. We perform several tests with the most recent data (LIS, OECD SOCX, and Eurostat: ECHP/EU-SILC). Our results are less clear cut than earlier findings. We still find a quite strong negative relationship between the level of social expenditure and poverty among OECD countries. However, for EU-countries this relationship is weaker and there are substantial differences within the EU15. After correcting for the impact of taxes and for private social arrangements, the linkage between social effort and poverty levels becomes even weaker. Also, we do not find a strong relationship between levels of social spending and antipoverty effects of social transfers and taxes. At the program level, family programs and child support alleviate poverty to a large extent

The redistributive impact of public and private social expenditure

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.Social Protection, Private Social Expenditure, Income Distribution

On the convergence of social protection systems in the European Union

Member states of the European Union are autonomous when it comes to the design of their social protection systems. However, they are committed by a Recommendation accepted by the European Council addressing the convergence of social protection objectives and policies. Beside that, it is expected that convergence of social protection systems could come about as a result of economic integration. In this paper we have examined whether such convergence has occurred during the past decades, using data on replacement rates and social expenditure ratios. We find a rather strong trend of relative convergence, but it does not follow that this trend is the result of the European integration.Social protection, European Union

Budgetary costs of tax facilities for pension savings: an empirical analysis

A wide variety of tax regimes for (occupational) private pension saving are in place around the world. Generally, pension saving is taxed at a relatively low rate, although the revenue loss due to tax facilities for pension savings and/or pension tax expenditures may differ across countries. A strong fiscal stimulus to build up pension capital will support funding. However, these tax facilities may become an expensive business for governments. This paper investigates the ex ante budgetary effects of a cash-flow tax regime for pension savings by full present-value calculations. The fiscal subsidy on pension savings in several (European) countries is often associated with the application of the cash-flow treatment of pensions under the personal income tax: pension contributions are tax exempt, capital income of pension funds is tax-exempt, and pension benefits are taxed, but usually the elderly aged 65 years and over are taxed at a relatively low rate. This form can be described as EET, with E denoting an exemption or relief from tax and T denoting a point at which tax is payable. Indeed, tax treatment of pension saving can have other forms as well. We consider a specified form of a comprehensive income tax system (TTE) as an appropriate benchmark. Using the TTE-benchmark, the ex ante budgetary cost of the current tax treatment of pension saving in countries can be quantified. We employ an empirical analysis for the Netherlands, because this country belongs, with its three pension pillars and its sound funding, to the leading group of countries in Europe with a solid pension system. Our calculations, using Income Panel Data from Statistics Netherlands for the years 1990-2003, show that current taxation on a cash-flow basis means on balance a major loss to the Treasury (compared to the benchmark). For the year 2003 we estimate a fiscal subsidy associated with the current Dutch tax rule of 1.2 to 1.5 percent of GDP, depending on the assumed rate of return on pension capital.pensions and annuities, tax treatment of pension savings, revenue loss to the Treasury

International trends in income inequality and social policy

In most OECD-countries income inequality has increased during the last two decades. In this paper, we investigate whether changes in the overall distribution of income can be attributed to social policy measures. For most (but not all) countries we find a possible relationship between changing welfare state policies (as measured by expenditure ratios and replacement rates) and changing income inequality. Especially the United Kingdom and the Netherlands combined an above-average rise in inequality with a reduction in the generosity of the welfare system. A more elaborate budget incidence analysis for the Netherlands indicates that in the period 1981-1997 inequality of disposable household income increased sharply. The two main forces behind this phenomenon were a more unequal distribution of market incomes and changes in social transfers. Fundamental social security reforms in the Netherlands indeed seem to have made the income distribution less equal. However, income inequality in the Netherlands is still below the OECD average at the end of the observed period.Social Policy, Income Distribution (Indices), Taxes and Transfers

Social policy and income distribution: An empirical analysis for the Netherlands

In most OECD-countries income inequality has increased during the last two decades. In this paper, we investigate to what extent changes in the overall distribution of incomes can be attributed to social policy measures. The case for the Netherlands is particularly interesting, because the Dutch welfare state has been reformed rather fundamentally in recent years. The budget incidence analysis indicates that in the period 1981-1996 inequality of adjusted disposable household income increased sharply. The main force behind this phenomenon was a more unequal distribution of market incomes, but social transfers also explain a substantial large part of the rise in inequality. Social security reforms indeed seem to have made the income distribution less equal. The results of a more detailed analysis for 1996 on the redistributive impact of social policy and of specific social programs - using data from an unique income panel survey - can be summarised as follows: - The first five income deciles clearly gain from social security, while the higher deciles loose. Social security causes a reduction in inequality by 26 to 50 percent, depending on the indicator used. - The public old age program and the social assistance program explain by far the largest part of redistribution by the social system, while the disability and unemployment programs do not have strong redistributive effects.Social Policy, Income Distribution (Indices), Taxes and Transfers

Social expenditure and poverty reduction in the EU15 and other OECD countries

The European Union coordinates and encourages Member State actions to combat poverty, and to reform their social protection systems on the basis of policy exchanges and mutual learning (‘best practices’). Some EU countries are more effective in poverty reduction than others. What can explain these variations in effectiveness? This paper analyzes the effectiveness of social transfers in alleviating poverty. We focus on EU15 countries, but also include other OECD countries in our analysis. We compare poverty rates at the levels of market and disposable incomes, that is before and after transfers, in order to analyze the effect of tax and transfer policies in reducing poverty, i.e. to determine the target efficiency of social transfers. We perform several tests with the most recent data (LIS, OECD, SOCX, and Eurostat: ECHP/EU-SILC). Finally, we perform several partial analyses by disaggregating poverty rates to socioeconomic and demographic conditions in order to investigate to what extent variations at the social program level (such as old age pensions, child benefits) affect the measured effectiveness of the welfare state in alleviating poverty. Empirical results draw heavily on how pensions are treated - as primary income or as transfer. We find a strong relationship between levels of social spending and antipoverty effects of social transfers and taxes across EU15 countries. Social spending seems to be an important determinant of a country’s poverty outcome, especially among the elderly, when pensions are considered as transfers. Our analysis highlights some cross-country differences in targeting of social expenditures on poverty alleviation in EU15 and non-EU15 countries around 2005. We introduce an indicator of Public Policy Effectiveness on Poverty Alleviation across countries. Each percentage point of social expenditure alleviates poverty in both EU15 and non-EU15 countries by .7 percentage points on average. Relatively high scores in EU15 countries are found for Ireland and Scandinavian countries, while Italy, Greece and Spain score lowest. Outside Europe the poorest scores are reported for Korea and the USA. Country ranking appears to be rather stable over time when outcomes for 1995 and 2005 are compared, although some of our results may be sensitive to cyclical factors. Finally, we analyzed poverty among vulnerable age groups. Our results show that family programs and child support alleviate poverty among children to a large extent, especially in non-EU15 countries. For public and private old age pension and survivors schemes we find no effect on poverty in case pensions are considered as transfers (both in EU15 and non-EU15 countries). However, this picture changes completely when pensions are counted as transfers. In that case the poverty rate among elderly in EU15 falls from 90 to 21 percent through taxes and social transfers!poverty, welfare states, Lisbon objectives, social indicators

Effectiveness of poverty reduction in the EU: A descriptive analysis

The European Union coordinates and encourages Member State actions to combat poverty, and to reform their social protection systems on the basis of policy exchanges and mutual learning (‘best practices’). Some EU countries are more effective in poverty reduction than others. What can explain these variations in effectiveness? This paper analyses the effectiveness of welfare state policies and especially social transfers in EU-countries in alleviating poverty. To indicate whether European economic integration may have had any impact on poverty reduction, we also include several non-EU15 countries as a benchmark into our analysis. We analyze on a cross-country basis the relationship between poverty rates and social effort, as measured by social expenditure ratios. We also correct these expenditure ratios for the impact of the tax system and for private social arrangements, using OECD methodology. Next, we compare poverty rates at the levels of market and disposable incomes, that is before and after transfers, in order to analyze the effect of tax and transfer policies in reducing poverty, i.e. to determine the target efficiency of social transfers. We perform several tests with the most recent data (LIS, OECD SOCX, and Eurostat: ECHP/EU-SILC). Our results are less clear cut than earlier findings. We still find a quite strong negative relationship between the level of social expenditure and poverty among OECD countries. However, for EU-countries this relationship is weaker and there are substantial differences within the EU15. After correcting for the impact of taxes and for private social arrangements, the linkage between social effort and poverty levels becomes even weaker. Also, we do not find a strong relationship between levels of social spending and antipoverty effects of social transfers and taxes. At the program level, family programs and child support alleviate poverty to a large extent.poverty, welfare states, Lisbon objectives, social indicators

Desk study of the possible impact of fisheries and other human activities on the marine environment in Mauritania. An exploration

Wageningen IMARES has been contracted by Dutch Ministry of Agriculture, Nature and Food Quality with funding from the “BO PPP”-programme to make an inventory of existing and expected future human activities in that part of the Eastern Atlantic Ocean that forms the Economic Exclusive zone of Mauritania with respect to their possible impact on the marine ecosystem. The inventory will mainly be focused on the different fisheries in the area, but will not be restricted to these. Based on this inventory of activities this report will consider data needed to properly assess the impacts on the ecosystem arising from these and the studies required to gather that data

The invasion of an introduced predator, Nile perch (Lates niloticus, L.) in Lake Victoria (East Africa): chronology and causes

Nile perch, a large predatory fish, was introduced into Lake Victoria in 1954. The upsurge of Nile perch in Lake Victoria was first observed in the Nyanza Gulf, Kenya, in 1979. In Ugandan waters this occurred 2¿3 years later and in the Tanzanian Mwanza Gulf 4¿5 years later. At the beginning of the upsurge in the Mwanza Gulf in 1983/1984 only sub-adult and adult fishes were found. The first juveniles appeared in 1985, suggesting that the initial increase of Nile perch was mainly caused by migration of sub-adults and adults. Shortly after the onset of trawl fishery in the area in 1973, haplochromines in the Mwanza Gulf started to decline. The final disappearance of the haplochromines, in 1987, only occurred after the Nile perch boom, and despite the abandoning of the haplochromine fishery in 1986. We hypothesize that the decline of haplochromines decreased predation on and competition with juvenile Nile perch and then facilitated survival of these juveniles. Consequently the immigration of sub-adult and adult Nile perch in an area may have paved the way for successful recruitment. Over-exploitation of haplochromine cichlids in the 1970s in the Nyanza Gulf, where the Nile perch upsurge was first observed, may have played a similar role