Targeting welfare is counter productive

Welfare systems targeted on the poor are less effective at reducing poverty than more universal systems, finds the Fabian Society and the Webb Memorial Trust in their report, The Coalition and Universalism: Cuts, Targeting and the Future of Welfare. Using an analysis of international data, the report shows that increased targeting of welfare harms the poor families it is intended to help, and that reducing the extent of universal provision erodes public support for welfare spending, leading to a reduced help for those who need it most. The report notes that these findings are highly counter-intuitive:

It shows that on average the amount redistributed to the poor actually decreases as welfare states become more targeted. Any increase in redistribution from an increase in targeting is clearly outweighed by the smaller expenditure that is associated with the lower willingness to pay of targeted welfare states. This confirms the hypothesis that strategies of targeting result in welfare states that do less redistribution to the poorest than strategies of universalism.

The report is highly critical of the Coalition government’s strategic aim to restrict the coverage of many universal benefits or services, removing them from higher-income households or targeting them specifically on lower-income households, as ideologically driven and against the evidence.

Read the full report from the Fabian Society.

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