The Welfare State and Redistribution

Figure 1. Welfare State Size and Income Redistribution. Percent Change in Gini, after taxes and transfers. Ca

Net Social Accounts: SwedenGermanyUSA Ratio Sweden/USA Gross public expenditure Net public Expenditure 1) Net private Expenditure 2) Net total social Expenditure

Table 1. Expenditure Profiles in Three Welfare regimes Total Net Private as %Non-health services Targeting: Public Total (P+P)as % of Total Public% of transfers ( % GDP) spendingSpendingto bottom Quintile 1) Nordic Anglo Continental Europe Source: calculations from Adema and Ladaique (2005: Table 6) and from Forster and d’Ercole (2005). 1) excludes the retired population.

Table 2. Household Income Inequality before and after the Welfare State. Ca All Households MarketDisposablePercentPercent Gini Income GiniInequalityInequalityReduction (excluding heads Aged 60+) Denmark Finland Norway Sweden Regime Mean Australia Canada UK US Regime Mean Belgium France Germany Italy Netherland Regime Mean Sources: Luxembourg Income Study (LIS) Fiscal redistribution data set.

Table 3. Household Inequality Reduction through Service Delivery. Spending on Percent inequalityPercent reduction Services reduction of via non-health and (% disposable income)disposable incomeeducation services Denmark Finland Norway Sweden Regime Mean Australia Canada Ireland N. Zealand UK US Regime Mean Austria France Germany Italy Netherlands Spain Regime Mean Source: recalculations from Marical et.al. (2006: Table A9)

Table 4. Poverty Reduction in Families with Children. Mid-1990s. 1) MarketPost-redistributionPercent reduction Povertypovertyof poverty Denmark30680 Finland18383 Norway29583 Sweden39490 Regime Mean29584 Australia Canada Ireland UK US Regime Mean Belgium France Germany Italy Netherlands Spain Regime Mean ) poverty is less than 50% of median equivalent income Source: LIS-based estimates, from Bradbury and Jantti (2001: 83)

Table 5. The persistency of income poverty in families with children 1) OneTwo Three+ Yearyearsyears Denmark France Germany Italy Spain UK US ) persistency has been estimated with Kaplan-Mayer survival functions. Income poverty is measured as 60% of adjusted median. Source: ECHP, for Europe and the PSID, , for the US.

Cost to government :Two Kids. Euros 2 years in creche + 3 years in pre-school Total cost to government Gains to mother: (a) 5 years with full earnings = (b) wage gain from no interuption = Total = Gains to Exchequer: additional revenue from (a) = additional revenue from (b) = Total = Net return to Exchequer ( ) =