Redistribution and Insurance in Welfare States around the World

29 Pages Posted: 16 Nov 2018

See all articles by Charlotte Bartels

Charlotte Bartels

German Institute for Economic Research (DIW Berlin) - German Socio Economic Panel

Dirk Neumann

University of Cologne

Multiple version iconThere are 2 versions of this paper

Date Written: October 4, 2018

Abstract

Redistribution across individuals in a one-year-period framework is an empirically intensely studied question. However, a substantial share of annual redistribution might turn out to serve individual insurance in a longer perspective. In particular, public pensions, that smooth incomes over the life-cycle and are funded by high taxes, play an increasingly important role in welfare states with aging societies. This paper investigates to what extent long-run redistribution diverges from annual redistribution in welfare states of different types. Exploiting panel data from the Cross-National Equivalent File (CNEF) for Australia, Germany, Korea, Switzerland, the United Kingdom and the United States, we find that supposedly highly redistributive welfare states like Germany provoke comparably less redistribution between individuals in the long-run than the United Kingdom or the United States. Regression results show that a higher share of elderly is associated with higher annual redistribution, but with less long-run redistribution between individuals.

Keywords: welfare states, redistribution, insurance

JEL Classification: D31, D63, H53, H55, I38

Suggested Citation

Bartels, Charlotte and Neumann, Dirk, Redistribution and Insurance in Welfare States around the World (October 4, 2018). SOEPpaper No. 985, Available at SSRN: https://ssrn.com/abstract=3280184 or http://dx.doi.org/10.2139/ssrn.3280184

Charlotte Bartels (Contact Author)

German Institute for Economic Research (DIW Berlin) - German Socio Economic Panel ( email )

DIW Berlin
Berlin, Berlin 14191
Germany

Dirk Neumann

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
19
Abstract Views
428
PlumX Metrics