Paradoxes of Social Policy: Welfare Transfers, Relative Poverty, and Redistribution Preferences

Korpi and Palme’s (1998) classic “The Paradox of Redistribution and Strategies of Equality” claims that universal social policy better reduces poverty than social policies targeted at the poor. This article revisits Korpi and Palme’s classic, and in the process, explores and informs a set of enduring questions about social policy, politics, and social equality. Specifically, we investigate the relationships between three dimensions of welfare transfers—transfer share (the average share of household income from welfare transfers), low-income targeting, and universalism—and poverty and preferences for redistribution. We analyze rich democracies like Korpi and Palme, but we also generalize to a broader sample of developed and developing countries. Consistent with Korpi and Palme, we show (1) poverty is negatively associated with transfer share and universalism; (2) redistribution preferences are negatively associated with low-income targeting; and (3) universalism is positively associated with transfer share...