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Long-run effects of public expenditure on poverty

Author

Listed:
  • Marisa Hidalgo-Hidalgo

    (Universidad Pablo de Olavide)

  • Iñigo Iturbe-Ormaetxe

    (Universidad de Alicante)

Abstract

Household characteristics may have long-run effects on individual outcomes in adulthood. For instance, individuals who lived when young in households experiencing financial problems are more likely to be poor when adults. Governments try to reduce these effects and to promote equality of opportunity. The objective of this paper is to check whether public expenditure has a long-run effect in reducing the probability of being poor when adult, and to what extent. Our main finding is that public expenditure on education has a strong long-run effect on reducing incidence of poverty in adulthood. We also find that this effect is concentrated mainly among individuals who have parents with a low level of education.

Suggested Citation

  • Marisa Hidalgo-Hidalgo & Iñigo Iturbe-Ormaetxe, 2018. "Long-run effects of public expenditure on poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(1), pages 1-22, March.
    • Handle: RePEc:spr:joecin:v:16:y:2018:i:1:d:10.1007_s10888-017-9360-z
    DOI: 10.1007/s10888-017-9360-z
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    Cited by:

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    2. Bosco, Bruno, 2019. "One size does not fit all: Quantile regression estimates of cross-country risk of poverty in Europe," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 280-299.
    3. Atif Khan Jadoon & Abeera Tanveer & Maria Faiq Javed & Ambreen Sarwar, 2021. "Minimum Wages and Poverty: A Cross-Country Analysis," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(8), pages 632-643, August.
    4. Jaya Krishnakumar & Ricardo Nogales, 2020. "Public Policies and Equality of Opportunity for Wellbeing in Multiple Dimensions: A Theoretical Discussion and Evidence from Bolivia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(1), pages 297-325, May.
    5. 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.
    6. Hofmarcher, Thomas, 2021. "The effect of education on poverty: A European perspective," Economics of Education Review, Elsevier, vol. 83(C).
    7. Carmen Păunescu & Elisabeta Molnar, 2020. "Country’s Entrepreneurial Environment Predictors for Starting a New Venture—Evidence for Romania," Sustainability, MDPI, vol. 12(18), pages 1-18, September.
    8. Aurora A. C. Teixeira & Ana Sofia Loureiro, 2019. "FDI, income inequality and poverty: a time series analysis of Portugal, 1973–2016," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 18(3), pages 203-249, October.
    9. Shreya Pal, 2024. "Do economic globalization and the level of education impede poverty levels? A non-linear ARDL approach," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 22(3), pages 621-667, September.

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    More about this item

    Keywords

    Public expenditure on education; Poverty rate; Intergenerational transmission of poverty;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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