Published In

Panoeconomicus

Document Type

Article

Publication Date

10-1-2011

Subjects

Welfare state -- European Union countries -- Moral and ethical aspects, Welfare state -- European Union countries -- Political aspects, Public welfare -- Political aspects, Economics -- Moral and ethical aspects -- European Union Countries -- 1995-2008, Economics -- Sociological aspects -- European Union Countries

Abstract

This inquiry analyzes how political orientations shape welfare states and labour market institutions when seeking to reduce poverty. In order to identify effects of these two key variables, we conduct a panel regression analysis that includes two poverty measures: poverty rates before and after social spending. This inquiry considers 14 EU countries, and in the period from 1995 to 2008, which are grouped according to welfare state regimes. We consider Social Democratic, Corporatist, Mediterranean and Liberal welfare state regimes. Panel regression results indicate that political orientation engenders no significant statistically measurable effects on poverty rates before social spending. Effects register, however, as significant when considering poverty rates after social spending. With respect to the first set of results, we advance two key explanations. First, we note a longer period of time is necessary in order to observe actual effects of political orientation on market generated poverty. Second, political parties with their respective programs do not register as influential enough to solve social problems related to income distribution when taken alone. Influences register as indirect and are expressed through changes in employment rates and social spending. The second set of results support the hypothesis that a selected political regime does indeed contribute to poverty reduction. In sum, political orientation and political regime does indeed affect poverty through welfare state institutions, as well as through labour market institutions.

DOI

10.2298/PAN1105651J

Persistent Identifier

http://archives.pdx.edu/ds/psu/9303

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