Public and private financial assistance in Europe

ABSTRACT

This analysis uses the European Union Statistics on Income and Living Conditions data for 2006–2011 to examine whether there is an identifiable relationship between public and private provision of financial assistance and whether increased public support is associated with receiving more or less private support. In line with previous research, the findings suggest that households in receipt of certain public financial assistance are more likely to receive financial assistance from their friends and family. Yet the paper goes further and argues that the effect is dependent on the nature of the policy. Specifically, active policies not related to previous labour market participation appear to be associated with greater financial assistance from friends and family compared to traditional, passive forms of welfare assistance which themselves show no effect. The paper therefore concludes that the association between private and public financial assistance is dependent upon the type of public assistance that is being considered.

KEYWORDS:

• Financial assistance
• inter-household transfers
• crowding out
• EU-SILC

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Thomas Emery is a Post-Doctoral Researcher at NIDI and Erasmus University Rotterdam. He is the current Programme Manager for the Generations and Gender Programme and his research interests lie in the study of intergenerational relations and family dynamics in a comparative perspective.

Notes

¹Public Financial assistance are monetary transfers to households and individuals directly from the national or local level government. Private Financial transfers are monetary transfers from other private households.

²There are strict assumptions that come with such an approach, the most onerous of which is the assumption that all factors at the household level which are correlated with the outcome variable are included within the model. This is an ambitious assumption and one that is also difficult to test in these circumstances but necessary nevertheless if we are to analyse comparative, longitudinal data regarding this issue.

³This figure was adjusted within the analysis as a robustness test and did not change the results considerably until it was over €2000. This may well indicate differential dynamics of larger payments but this is not the focus of the paper.

⁴Social Exclusion benefits refer to benefits targeted at low income households or individuals.