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.