Are Public and Private Social Expenditures Complementary?

International Advances in Economic Research, Volume 11, Number 2, pp. 175-189

Research Memorandum Department of Economics Leiden University 2004.01

Posted: 18 Jul 2009

See all articles by Koen Caminada

Koen Caminada

Leiden Law School - Department of Economics

Kees Goudswaard

Leiden Law School - Department of Economics

Date Written: 2005

Abstract

Most analyses of social protection are focussed on public arrangements. However, social effort is not restricted to the public domain; all kinds of private arrangements can be substitutes to public programs. OECD-data indicate that accounting for private social benefits has an equalising effect on levels of social effort across a number of countries. This suggests complementarity between public and private social expenditures. But their distributional effects differ. Using cross-country data, we find a negative relationship between net public social expenditures and income inequality, but a positive relationship between net private social expenditures and income inequality. We conclude that changes in the public/private mix in the provision of social protection may affect the redistributive impact of the welfare state.

Keywords: public/private-mix, social protection, income distribution

JEL Classification: D3, H22, H55

Suggested Citation

Caminada, Koen and Goudswaard, Kees, Are Public and Private Social Expenditures Complementary? (2005). International Advances in Economic Research, Volume 11, Number 2, pp. 175-189, Research Memorandum Department of Economics Leiden University 2004.01, Available at SSRN: https://ssrn.com/abstract=1434896

Koen Caminada (Contact Author)

Leiden Law School - Department of Economics ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands
++31715277858 (Phone)

HOME PAGE: http://www.law.leiden.edu/organisation/taxlawandeconomics/economics/staff/caminada.html

Kees Goudswaard

Leiden Law School - Department of Economics ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands

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