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GINI DP 82: The paradox of redistribution revisited: and that it may rest in peace?

Author

Listed:
  • Ive Marx

    (Centre for Social Policy, University of Antwerp)

  • Lina Salanauskaite
  • Gerlinde Verbist

    (Centre for Social Policy, University of Antwerp)

Abstract

There is a long-standing controversy in the academic literature over the question of whether targeting benefits towards the bottom part of the income distribution actually enhances or weakens their redistributive impact. Korpi and Palme have influentially claimed that “the more we target benefits at the poor, the less likely we are to reduce poverty and inequality”. The basic empirical underpinning of this claim is a strong inverse relationship at the country level between social transfer targeting and redistributive impact. This paper shows that this key finding no longer holds as a robust empirical generalisation. The relationship between the extent of targeting and redistributive impact over a broad set of empirical specifications, country selections and data sources has in fact become a very weak one, suggesting that the extent of targeting per se may not matter anymore as much as we have assumed since Korpi and Palme.

Suggested Citation

  • Ive Marx & Lina Salanauskaite & Gerlinde Verbist, 2013. "GINI DP 82: The paradox of redistribution revisited: and that it may rest in peace?," GINI Discussion Papers 82, AIAS, Amsterdam Institute for Advanced Labour Studies.
    • Handle: RePEc:aia:ginidp:82
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    References listed on IDEAS

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    Cited by:

    1. Lin Yang, 2018. "The net effect of housing-related costs and advantages on the relationship between inequality and poverty," CASE Papers /211, Centre for Analysis of Social Exclusion, LSE.
    2. Yang, Lin, 2018. "The relationship between poverty and inequality: resource constraint mechanisms," LSE Research Online Documents on Economics 103463, London School of Economics and Political Science, LSE Library.
    3. Aerts, Elise & Marx, Ive & Parolin, Zachary, 2022. "Minimum Income Support for Families with Children in Europe and the US: Where Does It Stand?," SocArXiv h8vqu, Center for Open Science.
    4. Victor Amoureux & Elvire Guillaud & Michaël Zemmour, 2019. "It Takes Two to Tango Income and Payroll Taxes in Progressive Tax Systems," Working Papers hal-02735278, HAL.
    5. Naoki Akaeda, 2023. "Does Social Policy Crowd Out or Crowd In Social Trust? The Perspectives of Transfer Share, Low-Income Targeting, and Universalism," LIS Working papers 870, LIS Cross-National Data Center in Luxembourg.
    6. Elise Aerts; & Ive Marx; & Zachary Parolin;, 2022. "Minimum income support for families with children in Europe and the US: where does it stand?," Working Papers 2204, Herman Deleeck Centre for Social Policy, University of Antwerp.
    7. De Donder, Philippe & Peluso, Eugenio, 2014. "Politically Sustainable Probabilistic Minority Targeting," CEPR Discussion Papers 10085, C.E.P.R. Discussion Papers.
    8. Katherine Baird, 2015. "Who Did Safety Nets Catch During the Great Recession and How? A Comparison of Eleven OECD Countries," LIS Working papers 620, LIS Cross-National Data Center in Luxembourg.
    9. Abigail McKnight, 2015. "A fresh look at an old question: is pro-poor targeting of cash transfers more effective than universal systems at reducing inequality and poverty?," CASE Papers /191, Centre for Analysis of Social Exclusion, LSE.
    10. Philippe De Donder & Eugenio Peluso, 2018. "Politically sustainable targeted transfers," Public Choice, Springer, vol. 174(3), pages 301-313, March.
    11. Bodenstein, Thilo & Kemmerling, Achim, 2015. "A Paradox of Redistribution in International Aid? The Determinants of Poverty-Oriented Development Assistance," World Development, Elsevier, vol. 76(C), pages 359-369.
    12. Pim Verbunt & Anne-Catherine Guio, 2019. "Explaining Differences Within and Between Countries in the Risk of Income Poverty and Severe Material Deprivation: Comparing Single and Multilevel Analyses," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(2), pages 827-868, July.
    13. András Gábos & Réka Branyiczki & Barbara Lange & György Tóth, 2015. "Employment and poverty dynamics in the EU countries before, during and after the crisis," ImPRovE Working Papers 15/06, Herman Deleeck Centre for Social Policy, University of Antwerp.
    14. Carlos Farinha Rodrigues & Isabel Andrade, 2014. "Robin Hood versus Piggy Bank: Income Redistribution in Portugal 2006-2010," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(5), pages 617-630, October.
    15. Victor Amoureux & Elvire Guillaud & Michaël Zemmour, 2019. "It Takes Two to Tango Income and Payroll Taxes in Progressive Tax Systems," SciencePo Working papers Main hal-02735278, HAL.
    16. Leventi, Chrysa & Rastrigina, Olga & Sutherland, Holly, 2016. "The importance of income-tested benefits in good times and bad: lessons from EU countries," EUROMOD Working Papers EM2/16, EUROMOD at the Institute for Social and Economic Research.
    17. Mcknight, Abigail, 2015. "A fresh look at an old question: is pro-poor targeting of cash transfers more effective than universal systems at reducing inequality and poverty?," LSE Research Online Documents on Economics 103977, London School of Economics and Political Science, LSE Library.
    18. Abigail McKnight, 2015. "A fresh look at an old question: is pro-poor targeting of cash transfers more effective than universal systems at reducing inequality and poverty?," ImPRovE Working Papers 15/14, Herman Deleeck Centre for Social Policy, University of Antwerp.
    19. Orsetta Causa & Mikkel Hermansen, 2017. "Income redistribution through taxes and transfers across OECD countries," OECD Economics Department Working Papers 1453, OECD Publishing.
    20. Massimo Baldini & Giovanni Gallo & Costanza Torricelli, 2020. "The scars of scarcity in the short run: an empirical investigation across Europe," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(3), pages 1033-1069, October.
    21. Lin Yang, 2018. "The relationship between poverty and inequality: Resource constraint mechanisms," CASE Papers /212, Centre for Analysis of Social Exclusion, LSE.
    22. Abigail McKnight, 2015. "A Fresh Look at an Old Question: Is Pro-Poor Targeting of Cash Transfers More Effective Than Universal Systems at Reducing Inequality and Poverty?," LIS Working papers 640, LIS Cross-National Data Center in Luxembourg.

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