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Reconciling Work and Poverty ReductionHow Successful Are European Welfare States?$
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Bea Cantillon and Frank Vandenbroucke

Print publication date: 2013

Print ISBN-13: 9780199926589

Published to Oxford Scholarship Online: April 2014

DOI: 10.1093/acprof:oso/9780199926589.001.0001

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The Redistributive Capacity of Services in the European Union

The Redistributive Capacity of Services in the European Union

Chapter:
(p.185) 6 The Redistributive Capacity of Services in the European Union
Source:
Reconciling Work and Poverty Reduction
Author(s):

Gerlinde Verbist

Manos Matsaganis

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199926589.003.0006

Welfare states provide social benefits in cash and – increasingly – in kind. This chapter analyses the redistributive capacity of services, more specifically health care, education and childcare. First, the methodological issues associated with the quantification of social service delivery and the construction of a counterfactual are explored. The results show that services reduce inequality more than cash benefits do. To correctly interpret this result, it is however important to disentangle the effect of ‘size’ and the effect of ‘design’. Services for non-elderly individuals are, in all countries, much more important in size than cash transfers for the non-elderly, a fortiori if education is included. Using concentration coefficients it is shown that, in most countries, cash transfers are more ‘pro-poor’ than in-kind benefits. Obviously, the larger the share of either spending on cash benefits or spending on services, the larger the equalizing impact on the (extended) income distribution.

Keywords:   social redistribution, income inequality, in-kind benefits, social spending, extended income, cash benefits

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