Targeted transfers, a left-wing policy? The impact of left-wing governments and corporatism on transfers to low-income families (1982–2019)

Abstract

In the last decades, several countries introduced new income-tested child benefits and targeted in-work tax credits to boost the income of low-income families. Inspired by the power resource theory, I postulate that left-wing governments tend to increase benefits to low-income families because their ideology favours redistribution and to consolidate the vote of low-income families, but that both right- and left-wing governments increase benefits for middle-income families. The impact of left-wing governments should be stronger in countries with a weak bargaining system as social partners are unable to reduce inequalities between families. To demonstrate this argument, I use statistical analyses based on OECD data to measure the effect of government ideology and corporatism on the level of benefits received by low- and middle-income families in OECD countries from 1982 to 2019. The results indicate that left-wing parties have a significant impact on benefits received by low-income families, but not on benefits received by middle-income families. Also, even though corporatism is associated with different types of child benefits, it does not influence the relationship between left-wing governments and benefits received by low-income families.