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Social Expenditure in the European Union: Does Inequality Matter?

Author

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  • Agustin Molina-Morales
  • Ignacio Amate-Fortes
  • Almudena Guarnido-Rueda

Abstract

Do countries with serious inequality problems make a greater effort to rectify this situation? Is equality a key element in social spending budget design? We attempt to answer these, and other, questions throughout this article. The objective of this paper is to analyze the economic and institutional factors influencing, to a greater or lesser degree, social spending in the 27 countries that comprise the European Union (EU). To this end, we use a data panel for a period of eleven years and add further variables to those generally used, such as income distribution, poverty rate, governing party ideology, index of economic freedom, and belonging to the Eurozone. The results we obtained prove that the estimated model is robust, and that economic development, economic freedom, and the euro currency creation have all led to greater social spending. However, growing income inequality has not led to an increase in social expenditure.

Suggested Citation

  • Agustin Molina-Morales & Ignacio Amate-Fortes & Almudena Guarnido-Rueda, 2013. "Social Expenditure in the European Union: Does Inequality Matter?," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(3), pages 745-764.
    • Handle: RePEc:mes:jeciss:v:47:y:2013:i:3:p:745-764
    DOI: 10.2753/JEI0021-3624470308
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    Cited by:

    1. Ivana Velkovska & Borce Trenovski, 2023. "Economic growth or social expenditure: what is more effective in decreasing poverty and income inequality in the EU - a panel VAR approach," Public Sector Economics, Institute of Public Finance, vol. 47(1), pages 111-142.
    2. Martínez-Navarro, Diego & Amate-Fortes, Ignacio & Guarnido-Rueda, Almudena & Oliver-Márquez, Francisco J., 2022. "Institutional Kuznets curve? An empirical analysis with panel data," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 35-39.
    3. Jianu, Ionut & Gavril, Ioana Andrada & Iacob, Silvia Elena & Hrebenciuc, Andrei, 2021. "Income Inequalities and their Social Determinants: an Analysis over Developed vs. Developing EU Member States," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 55(2), pages 125-142.
    4. Ignacio Amate-Fortes & Almudena Guarnido-Rueda, 2023. "Inequality, public health, and COVID-19: an analysis of the Spanish case by municipalities," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(1), pages 99-110, February.
    5. Renata Halaskova, 2018. "Structure of General Government Expenditure on Social Protection in the EU Member States Using Differentiation Characteristics," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 14(4), pages 7-21.

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