Manuela Coromaldi

Does Cutting Back the Public Sector Improve Efficiency? Some Evidence from 15 European Countries

The successful development of the welfare state that transpired for three decades after WWII in the developed countries, came to a halt around the end of the 1980s. Since then, the number of articles and books dedicated to the crisis of the welfare state has increased. We can now assert that at the turn of the century, almost all industrialized countries had cut at least “some” entitlements in their welfare program along with other expenditure items, and the trend continued in the first decade of this century. To defend the cuts and possibly to justify continuing cuts, several economic reasons, both theoretical and empirical, have been highlighted. From mention of Baumol’s disease to the fiscal crisis, the support for making such decisions by governments gained momentum, with their political inspiration changing during the same period in favor of more conservative, right-wing positions. The low productivity of the public sector and the high level of tax burden were the substantial arguments used to support cuts. The aim of this paper is to provide an empirical investigation into the impact of retrenchment of the public sector on the performance of 15 European countries. In particular, we aim to empirically test the view that “big government” reduces a countrys efficiency. We have found that no such empirical support exists. We have also included analysis of the distribution of income through the Gini index and have found the standard trade-off relation between inequality and efficiency.

Family Transfers and Child Poverty in Greece, Italy, Spain and Portugal

The paper examines the effect of family transfers on child poverty in Greece, Italy, Spain and Portugal. Family transfers are defined as to include non-contributory child benefits, contributory family allowances and tax credits or allowances. The drive to reduce child poverty is of particular interest in southern Europe, where public support to poor families with children is often meagre or not available at all. The paper uses the European cross-country microsimulation model, EUROMOD, to assess the distributional impact of existing family transfers and to explore the scope for policy reforms, before it concludes with a discussion of key findings and policy implications.

The impact of climate change on the distribution of rural income in Ethiopia

Abstract Recent evidence suggests that global climate change is likely to increase the incidence of environmental disasters, as well as the frequency of extreme weather events. As a result, it is generally recognized that climate and weather variability has negative impacts on households’ welfare relying mainly on agriculture. In Ethiopia, 95% of the population depends on rain-fed agriculture and consequently the economic impact of climate change is crucial for small-scale farmers’ food security and welfare. The objective of this study is to provide a comprehensive analysis of the impact of climate change on rural households’ welfare in Ethiopia by using a Quantile Regression (QR) analysis. The main econometric results show that the elasticity of crop income with respect to rainfall varies across quantiles. It is confirmed that there is a non-linear relationship between climatic variables and income.

An Analysis of Multidimensional Poverty: Evidence from Italy

It is widely agreed that poverty should be conceptualized as a multidimensional phenomenon, more related to the standard of living of the person or household than to the simple inability of satisfying basic subsistence needs. In this paper‚ we provide a more articulated picture of poverty in Italy by overlapping monetary and non-monetary measures of poverty. Application of Multiple Correspondence Analysis results in the identification of five dimensions of deprivation, namely “maintenance capacity‚” “consumption deprivation‚” “health deprivation‚” “housing environment‚” and “housing facilities.” Our results show that the use of multidimensional poverty indicators improves the poverty analysis as compared to a traditional income-based approach. Further, while maintenance capacity is highly correlated with income, other dimensions of deprivation, such as health, housing environment, and housing facilities, are found to be unrelated to income. To deeply analyze the relationship between income and deprivation, a cluster analysis (K-means) is carried out to group households on the basis of a standardized income variable and deprivation scores of the first dimension. Seven clusters are identified. Our findings highlight that, on the one hand, for about 46% of Italian households, income information is not explanatory and descriptive of their deprivation status. On the other hand, some households are poor in terms of income but are not deprived in terms of maintenance capacity.