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Kako Ito

Public insurance and the least well-off | Lane Kenworthy - 6 views

lanekenworthy.net/surance-and-the-least-well-off

public insurance economics welfare poor nordic model universalism targeting redistribution income inequality

shared by Kako Ito on 27 Sep 15 - No Cached
  • Public insurance also boosts the living standards of the poor. It increases their income, and it provides them with services for which they bear relatively little of the cost.
  • Critics charge that public social programs tend to hurt the poor in the long run by reducing employment and economic growth. Are they correct?
  • Does public insurance erode self-reliance? Is a large private safety net as helpful to the least well-off as a large public one? Are universal programs more effective than targeted ones? Are income transfers the key, or are services important too?
  • ...17 more annotations...
  • Once again we see no indication that public insurance generosity has had a damaging effect
  • Note also that the employment rate increased in nearly all of the countries during this period. On average, it rose by nine percentage points between 1979 and 2013. That’s not what we would expect to see if generous public insurance programs were inducing large numbers of able adults to withdraw from the labor market
  • What we see in the chart is that countries with more generous public insurance programs tend to have less material deprivation.
  • With globalization, the advance of computers and robots, increased pressure from shareholders for short-run profit maximization, union weakening, and other shifts, wages have been under pressure. Couple this with the fact that many people at the low end of the income ladder have labor market disadvantages — disability, family constraint, geographic vulnerability to structural unemployment — and we have a recipe for stagnation in the market incomes of the poor.
  • here’s a good reason for these shifts: government provision offers economies of scale and scope, which reduces the cost of a good or service and thereby makes it available to many people who couldn’t or wouldn’t get it on their own.
  • Government provides more insurance now than it used to. All of us, not just some, are dependent on it. And life for almost everyone is better because of it
  • hese expenditures are encouraged by government tax advantages.22 But they do little to help people on the bottom of the ladder, who often work for employers that don’t provide retirement or health benefits.
  • To make them more affordable, the government claws back some of the benefit by taxing it as though it were regular income. All countries do this, including the United States, but the Nordic countries do it more extensively. Does that hurt their poor? Not much. The tax rates increase with household income, so much of the tax clawback hits middle- and upper-income households.
  • Another difference is that public services such as schooling, childcare, medical care, housing, and transportation are more plentiful and of better quality for the poor in the Nordic countries. Public services reduce deprivation and free up income to be spent on other needs. It’s difficult to measure the impact of services on living standards, but one indirect way is to look at indicators of material deprivation,
  • Targeted transfers are directed (sometimes disproportionately, sometimes exclusively) to those with low incomes and assets, whereas universal transfers are provided to most or all citizens.
  • Targeted programs are more efficient at reducing poverty; each dollar or euro or kroner transferred is more likely to go to the least well-off. Increased targeting therefore could be an effective way to maintain or enhance public insurance in the face of diminished resources.
  • “the more we target benefits to the poor … the less likely we are to reduce poverty and inequality.”
  • Korpi and Palme found that the pattern across eleven affluent nations supported the hypothesis that greater use of targeting in transfers yields less redistribution
  • The hypothesis that targeting in social policy reduces political support and thereby lessens redistributive effort is a sensible one. Yet the experience of the rich countries in recent decades suggests reason to question it. Targeting has drawbacks relative to universalism: more stigma for recipients, lower take-up rates, and possibly less social trust.44 But targeting is less expensive. As pressures to contain government expenditures mount, policy makers may therefore turn to greater use of targeting. That may not be a bad thing.
  • Public insurance programs boost the incomes of the least well-off and improve their material well-being. If such programs are too generous, this benefit could be offset by reduced employment or economic growth, but the comparative evidence suggests that the world’s rich nations haven’t reached or exceeded the tipping point.
  • Spending lots of money on social protection is not in and of itself helpful to the poor. Total social expenditures in the United States are greater than in Denmark and Sweden, because the US has a large private welfare state. But relatively little of America’s private social spending reaches the poor.
  • Public services are an important antipoverty tool. Their benefit doesn’t show up in income data, but they appear to play a key role in reducing material hardship. Services expand the sphere of consumption for which the cost is zero or minimal. And they help to boost the earnings and capabilities of the poor by enhancing human capital, assisting with job search and placement, and facilitating work-family balance.
  • Kako Ito on 27 Sep 15
     
    Through this article I have gained a deeper insight in how public expenditures and public goods promote wealth equality in a society. "Public services are an important antipoverty tool."
  • ...2 more comments...
  • olivialum on 29 Sep 15
     
    This article really helped me deepen my understanding of redistributing wealth downwards. I never thought about it, but things like social security, affirmative action programs, and public education are actually insurances that attempt to provide everybody with more equality when it comes to living standards as well as basic human rights.
  • samoshay on 29 Sep 15
     
    Yeah, it is a very common argument to say that social expenditures disincentives workers; interesting analysis on how wealthy countries haven't reached the "tipping point." I am curious to see what happens to labor force participation and employment in the next decades as robots further divorce economic growth from labor supply/demand.
  • charlesleesohn on 29 Sep 15
     
    Cool theory in regards to "the tipping point". Interesting, and solid criticism of large social expenditures. Wonder how socialists view this, as opposed to free-market economists.
  • smowat on 29 Sep 15
     
    "Public services are an important antipoverty tool. Their benefit doesn't show up in income data, but they appear to play a key role in reducing material hardship." INteresting to see the statistics and how social expenditures help reduce poverty and the wealth gap.
sidc2022

In World's 'Happiest' Countries, Signs of a Happiness Gap - 4 views

www.nytimes.com/...ordic-countries-happiness.html

NYTimes

shared by sidc2022 on 31 Aug 21 - No Cached
  • anays2023 on 31 Aug 21
     
    This makes it feel like world happiness levels could eventually take the place of money/ or other social inequality creators
  • lauran5556555 on 01 Sep 21
     
    Hmm, this article does not compare those "happy" countries with other parts of the world, so I wonder what the statistics show. Also, I wonder if social media has had a bigger effect on these Nordic countries than other parts of the world.
  • agnesg22 on 01 Sep 21
     
    I'd be interested to see how more of how the "happiness gap" intersects with the wealth gap. Also, I wonder if other countries experience the same problem with younger generations being more unhappy. It would have been helpful to have a comparison between these Nordic countries and countries in other parts of the world.
Kay Bradley

The Social Welfare State, beyond Ideology: Scientific American - 0 views

www.scientificamerican.com/article.cfm

globalization Industrialized Democracies social welfare taxes education

shared by Kay Bradley on 14 Oct 12 - Cached
  • Jasper Arasteh on 15 Oct 12
     
    I think that finding a balance between the freedom and social welfare has always been an issue in America and thats why this is such an interesting article. The Nordic countries seem to have a very good balance of free market success and equality. These countries would be good examples for America but there are two reasons that make this difficult. First off, many Americans seem to be deeply afraid of anything resembling socialism or communism. Second all these nordic states are small and relatively homogenous. This makes it much easier for the government to provide social welfare that meets everybody's needs and keeps everyone happy. The US is huge and has a much more diverse population. This makes for a completely different problem. While a social democratic government has worked so well for Scandinavia, we are far from getting to a state like that in the US.
  • Jasper Arasteh on 15 Oct 12
     
    Even though I believe a government like that would be ideal for the US, it is not very realistic due to how conservative the US is compared to Scandinavia.
slavatalanov

Swedish voters boost anti-immigration party amid high crime - 0 views

apnews.com/...061363b01b3bc53158f49e06edc0b1

shared by slavatalanov on 14 Sep 22 - No Cached
  • slavatalanov on 14 Sep 22
     
    Immigration has been a very important topic for Swedes in these past five years, and many Swedes have grown very resistant towards letting in any more refugees from the Middle East. The Nordics are touted as these examples of equality under capitalism, and yet these results reveal a perhaps uncomfortable truth: Swedes believe the homogeneity of their country, not their economic system, is the origin of their success; they will vote for a neonazi-adjacent faction over the very party that created their welfare system if they believe the ethnic unity of Sweden is threatened.
  • Kay Bradley on 17 Sep 22
     
    "Swedes believe the homogeneity of their country, not their economic system, is the origin of their success;" Isn't it both--the social democratic system and the homogeneous population, until the last two decades? How might we use this article as a mirror for the US in the sense that, even now, a certain percentage of white Americans think that the US was better when white (and male) people were the only ones worthy of consideration in this country's social and economic contract?
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