Is Social Protection a Luxury Good?
The claim that social protection is a luxury good—with a national income elasticity exceeding unity—has been influential. The paper tests the “luxury good hypothesis” using newly-assembled data on social protection spending across countries since 1...
| Main Authors: | , , |
|---|---|
| Format: | Working Paper |
| Language: | English English |
| Published: |
World Bank, Washington, DC
2022
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/099742509132261027/IDU0b41d2c00053a104e480a7fc0687ec7afed54 http://hdl.handle.net/10986/38010 |
| Summary: | The claim that social protection is a
luxury good—with a national income elasticity exceeding
unity—has been influential. The paper tests the “luxury good
hypothesis” using newly-assembled data on social protection
spending across countries since 1995, treating the pandemic
period separately, as it entailed a large expansion in
social protection efforts. While the mean income share
devoted to social protection rises with income, this is
attributable to multiple confounders, including relative
prices, weak governance in low-income countries and access
to information-communication technologies. Controlling for
these, social protection is not a luxury good. This was also
true during the pandemic. |
|---|