Saturday, April 15, 2017

Refuting Kenworthy (1999)

Lane Kenworthy authored a paper claiming that welfare does not increase poverty in the long run. He averaged government transfers reported in OECD data over the period 1960-91 and regressed this upon an absolute poverty threshold in 1991. He considered several collinearity issues and found them unimportant; thus, the issue is simply whether welfare spending correlates with poverty.

His preferred measure of welfare , the decommodification index, is simply a measure of how white a country is:
Poverty correlates with climate (weather from climatetemps.com for capital city, Fahrenheit):
For a given climate, welfare has no correlation with poverty:

Friday, April 14, 2017

Refuting Billari (2009)

Many economists claim that social security reduces fertility for complicated reasons involving old age security- and not the obvious one, that social security is transfer from young fertile populations to older infertile populations. One such paper is shown below. It studies the effect of the 1992 Amato and 1995 Dini reforms.


They provide details of the reforms in the below table.

 The main effect of the reforms was to decouple benefits from real wages. If Italian workers correctly expected real wages to fall in the second half of the 90s, then they are actually better off under the new system- contrary to what the authors imply.
Consider also this IMF paper:

So the second reform is potentially better for those subject to it as well.

In conclusion, the authors do not present a compelling case that the reforms were expected to reduce benefits during the period the authors studied.