European welfare states. Does decentralization affect poverty?

The shifting of welfare systems to the local level may have positive or negative consequences. On the one hand, it may be argued that local governments better tailor welfare policies to the specific needs of population, given their direct knowledge of territory; on the other hand, especially in the presence of weak su- pervision by the central government, decentralization may cause inequalities and territorial fragmentation. The main objective of the paper is to explore the relation- ship between welfare state typologies - with different degrees of decentralization - and the level of monetary poverty and material deprivation of citizens. Using data from official statistics, we model individual binary outcomes (living or not under the poverty line, being or not able to make ends meet) as a function of both family- level and country-level characteristics. The empirical analysis is run on a selection of European countries for the year 2013.