IFREE-Sponsored Lecture Series at ESI

Price Fishback, Ph.D.
Sept. 16th, 2011

Comparisons Across Time and Space of Poverty and Social Insurance Programs

“One of the central issues in any society is how it insures against risk and helps the poor and the disadvantaged. Over the past hundred years societies have expanded the extent of insurance both through government and nongovernment programs. The developed countries have followed a variety of paths. The Nordic countries have focused on a universal approach that relies extensively on government programs. Government social insurance and poverty programs have also expanded in the United States, but the U.S. programs are more focused on providing a safety net for those in need than on universal provision.

The paper to be presented on September 16 compares and contrasts the extent of social welfare spending in the Nordic countries and the U.S. over the period from 1900 through 2003. Most comparisons focus only on government social welfare spending. The Nordic programs spend a substantially larger share of GDP on government social welfare spending than the U.S. However, they also collect more taxes on benefits, so that the difference in the net spending on social welfare between the U.S. and the Nordic countries is much smaller. In terms of absolute spending, net social welfare spending is similar between the U.S. and the Nordic Countries. Once private spending is added the U.S. spends more than the Nordic countries per person in purchasing power parity dollars. I also will emphasize the enormous variability inside the United States. Essentially, the final message is that both the U.S. and the Nordic countries spend between $5,000 and $7,000 per capita on social welfare spending in 1990 dollars, but the public/private mix is quite different.”

Bio:
Price Fishback is the Thomas R. Brown Professor of Economics at the University of Arizona and a research associate with the National Bureau of Economic Research. He also serves as co-editor of The Journal of Economic History. He has been a Trustee of the Economic History Association and was one of the organizers of the Cliometrics Conference between 1996 and 2008. The term “cliometrics” was coined in the 1960’s and is a quantitative approach to economic history using economics and statistics.

Fishback received his doctorate in economics at the University of Washington in 1983. After teaching at the University of Georgia and the University of Texas in the 1980s, he moved to the University of Arizona in 1990. Price has won several teaching awards in the Eller College MBA programs. He has also conducted research and published several books and articles on a variety of topics, including labor market discrimination, segregated schools, workplace safety regulation, workers’ compensation, coal miners and violence in strikes.

Abstract:
The extent of social expenditures in the U.S. and the Nordic Countries is compared in the early 1900s and again in the early 2000s. The common view that America spends much less on social welfare than the Nordic countries does not survive closer inspection when we consider the differences in the structures of social expenditures. The standard comparison examines gross social expenditures. After adjustments for direct and indirect taxes paid, the net social expenditures in the Nordic countries are much closer to American levels. Inclusion of mandatory and private social expenditures raises the American share of GDP devoted to social expenditures to rank among the middle of the Nordic countries. Per capita net public social expenditures in the U.S. rank behind only Sweden. Add in the private spending, and per capita spending in the U.S. is higher than in all of the Nordic countries. Finally, I document the enormous diversity across time and place in public social expenditures in the U.S. in the early 1900s and circa 1990.

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