1. The Welfare State and Redistribution

2. Figure 1. Welfare State Size and Income Redistribution. Percent Change in Gini, after taxes and transfers. Ca. 2000.

3. Net Social Accounts: SwedenGermanyUSA Ratio Sweden/USA Gross public expenditure 35.729.215.82.26 Net public Expenditure 1) 28.527.317.51.63 Net private Expenditure 2) 2.2 1.6 8.1 Net total social Expenditure 30.628.925.61.20

4. 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) Nordic25 51834 Anglo19 19 443 Continental Europe26 8 530 Source: calculations from Adema and Ladaique (2005: Table 6) and from Forster and d’Ercole (2005). 1) excludes the retired population.

5. Table 2. Household Income Inequality before and after the Welfare State. Ca. 2000. All Households MarketDisposablePercentPercent Gini Income GiniInequalityInequalityReduction (excluding heads Aged 60+) Denmark.42.234738 Finland.43.254335 Norway.41.253928 Sweden.45.254540 Regime Mean.43.254435 Australia.45.323126 Canada.41.302720 UK.50.353124 US.47.372116 Regime Mean.46.332822 Belgium.48.264637 France.49.294127 Germany.46.264329 Italy.46.3324 Netherland.44.254426 Regime Mean.47.284030 Sources: Luxembourg Income Study (LIS) Fiscal redistribution data set.

6. 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 Denmark374118 Finland2728 8 Norway343616 Sweden404221 Regime Mean353716 Australia2830 7 Canada2621 3 Ireland2323 3 N. Zealand2524 3 UK2021 3 US2222 2 Regime Mean2424 4 Austria2624 0 France3330 7 Germany2826 4 Italy2524 0 Netherlands2020 4 Spain2322 0 Regime Mean2624 3 Source: recalculations from Marical et.al. (2006: Table A9)

7. Table 4. Poverty Reduction in Families with Children. Mid-1990s. 1) MarketPost-redistributionPercent reduction Povertypovertyof poverty Denmark30680 Finland18383 Norway29583 Sweden39490 Regime Mean29584 Australia321747 Canada291645 Ireland281546 UK392146 US312616 Regime Mean321940 Belgium31 681 France401075 Germany311261 Italy372143 Netherlands25 868 Spain301357 Regime Mean321264 1) poverty is less than 50% of median equivalent income Source: LIS-based estimates, from Bradbury and Jantti (2001: 83)

8. Table 5. The persistency of income poverty in families with children 1) OneTwo Three+ Yearyearsyears Denmark.41.28.03 France.59.42.13 Germany.49.30.09 Italy.64.41.16 Spain.60.37.12 UK.49.29.11 US.81.71.58 1) persistency has been estimated with Kaplan-Mayer survival functions. Income poverty is measured as 60% of adjusted median. Source: ECHP, 1994-2001 for Europe and the PSID, 1993-1997, for the US.

9. Cost to government :Two Kids. Euros 2 years in creche + 3 years in pre-school Total cost to government 72.850 Gains to mother: (a) 5 years with full earnings =114.300 (b) wage gain from no interuption = 200.100 Total = 314.400 Gains to Exchequer: additional revenue from (a) = 40.000 additional revenue from (b) = 70.000 Total =110.000 Net return to Exchequer (110.000-72.850) = 37.150