Welfare Regimes and Poverty Dynamics: The Duration and Recurrence of Poverty Spells in Europe

Abstract

This article seeks to evaluate how well the different welfare states of Europe perform in terms of preventing recurrent and persistent income poverty and what household and individual characteristics influence poverty duration. Because we use cross-national data on longitudinal poverty, we are able to increase our understanding of the effect of the institutional context within which poverty occurs. We show that country welfare regimes strongly influence longrun poverty, with social democratic countries reducing the level of persistent and recurrent poverty. Liberal and Southern European regime countries have both higher rates and longer durations of poverty. Despite their dissimilar patterns of poverty duration, European welfare states display rather similar patterns of exit from poverty, once we control for duration. There is some evidence that high initial exit rates from poverty in social democratic and corporatist countries decrease quickly whereas those in liberal and Southern European countries remain high, which could suggest lower levels of incentives in the former.

Testing a Typology of Homelessness Across Welfare Regimes: Shelter Use in Denmark and the USA

“…Whilst theories on convergence amongst welfare systems have been widely debated (Kautto et al, 2001), Denmark is still largely characterised as a social-democratic welfare state, whereas the USA is classified as a liberal welfare state (Fouarge & Layte, 2005;O'Sullivan, 2010). A comparison from the OECD shows that the share of Danes living with less than 50 per cent of median equalised household income in 2010 was only 6 per cent compared to 17 per cent for the USA (OECD, 2014).…”

Poverty persistence and poverty dynamics

“…A common finding across many countries is that being retired, living in a household in which no one is employed, or living in certain types of household (such as singleparent households) significantly increases the likelihood of being persistently poor ( Figure 1) [1], [5], [13]. There is also evidence for Italy and the US that female-headed households tend to have a higher risk of persistent poverty, though not for Germany [2], [3], [4].…”

“…There is also evidence for Italy and the US that female-headed households tend to have a higher risk of persistent poverty, though not for Germany [2], [3], [4]. In most countries, a high level of education has been found to considerably reduce the risk of persistent poverty [2], [3], [4], [5], [13].…”

“…Crosscountry evidence also suggests that the risk of persistent poverty tends to be higher and more concentrated in Canada and the US than in Germany and the UK [5]. There is also evidence that among European countries, social democratic-leaning countries (Denmark, the Netherlands) have somewhat lower risks of persistent poverty than countries with corporatist leanings (Belgium, France, Germany), which in turn have much lower risks than southern European countries (Italy, Greece, Portugal, Spain) and countries with liberal leanings (Ireland, UK) [13].…”

“…This suggests the existence of incentive problems in the first group of countries [13]. Apart from these differences, which are often just differences in levels, it is remarkable that both the patterns of entries and exits and the correlates of persistent poverty are shared across a large number of countries [13].…”