Determinant factors in the convergence of welfare effort in OECD countries: a decomposition of the Theil indices

Abstract

This article uses Theil's index to confirm the convergence of welfare effort in 21 developed countries. Taking advantage of the properties of this index, this article decomposes the dispersion of effort into its immediate determinants and thus illustrates that it is possible for there to be convergence in welfare effort but not in the intensity with which national systems protect their citizens.

Notes

¹In particular, the paper by Starke et al. (2008) uses the now-classic measures of convergence popularized by Barro and Sala-i-Martín (1992): σ and β convergences.

²The 21 countries are Germany, Australia, Austria, Belgium, Canada, Denmark, Spain, the United States, Finland, France, Greece, the Netherlands, Ireland, Italy, Japan, Norway, New Zealand, Portugal, the United Kingdom, Sweden and Switzerland.