Do Social-Welfare Policies Reduce Poverty? A Cross-National Assessment

Most social scientists, policymakers, and citizens who support the welfare state do so in part because they believe social-welfare programs help to reduce the incidence of poverty. Yet a growing number of critics assert that such programs in fact fail to decrease poverty, because too small a share of transfers actually reaches the poor, or because such programs create a welfare/poverty trap, or because they weaken the economy. This study assesses the effects of social-welfare policy extensiveness on poverty rates across fifteen affluent industrialized nations over the period 1960–91, using both absolute and relative measures of poverty. The results strongly support the conventional view that social-welfare programs reduce poverty.