Relationships between Pension Spending, Poverty Reduction, and Economic Growth: Evidence from the European Union Countries

Maria Teresa Garcia () and Adriana Maria Fernandes Ferreira

European Research Studies Journal, 2023, vol. XXVI, issue 2, 148-163

Abstract: Purpose: The purpose of this paper is to examine the impact of pension spending on both poverty and economic growth. Design/Methodology/Approach: The paper considers pooled ordinary least squares and fixed effects regression models as well as two-stage least squares (2SLS) regression analysis, and uses annual panel data from 24 European Union Member States, from 2007 to 2018. Findings: The results show that pension spending is relevant for reducing poverty and suggest that pension spending has no impact on gross domestic product growth. Practical implications: The results in this paper should advance our understanding of the fundamental role of public pension systems in alleviating poverty and in contributing to inclusive growth. Originality value: To our knowledge, our study is the first that utilises pension expenditure and its impact on both poverty and economic growth using data from European Union countries.

Keywords: Pension expenditure; public pensions; poverty; economic growth; European Union. (search for similar items in EconPapers)
JEL-codes: H55 I32 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ers:journl:v:xxvi:y:2023:i:2:p:148-163

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