Income Distribution and Social Expenditures: A Crossnational Perspective

Lars Osberg, Jonathan Schwabish and Timothy Smeeding ()

No 350, LIS Working papers from LIS Cross-National Data Center in Luxembourg

Abstract: We assemble data from several different sources to examine the cross-national effects of inequality and trust on social expenditures. We find that the inequality between the middle classes and the poor (as measured by the 50/10 percentile ratio) has a small, positive impact in social spending; but inequality between the ends of the distribution and middle class (measured by the 90/50 percentile ratio) has a large and negative impact on social spending. Different measures of trust are shown to have a large and positive impact on spending, implying that more cohesive, trusting societies are more willing to share economic resources with others not so fortunate. Our results suggest that as the rich become more distant from the middle and lower classes, they find it easier to opt out of public programs and to buy substitutes for social insurance in the private market. This funding implies that over time rising inequality will erode support for social institutions and social spending that provides insurance against income loss, upward mobility for the disadvantaged, and equality of opportunity for all citizens.

Pages: 59 pages
Date: 2004-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in In K. Neckerman (ed.),Social Inequality. NY: RussellSage Foundation, pp. 821-859, 2004

Downloads: (external link)
http://www.lisdatacenter.org/wps/liswps/350.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lis:liswps:350

Access Statistics for this paper

More papers in LIS Working papers from LIS Cross-National Data Center in Luxembourg Contact information at EDIRC.
Bibliographic data for series maintained by Piotr Paradowski ().