Are government transfers harmful to economic growth? A meta-analysis

Awaworyi Churchill, S and Yew, S 2017, 'Are government transfers harmful to economic growth? A meta-analysis', Economic Modelling, vol. 64, pp. 270-287.

Document type: Journal Article
Collection: Journal Articles

Title Are government transfers harmful to economic growth? A meta-analysis
Author(s) Awaworyi Churchill, S
Yew, S
Year 2017
Journal name Economic Modelling
Volume number 64
Start page 270
End page 287
Total pages 18
Publisher Elsevier
Abstract A common perception is that government transfers are harmful to economic growth. However, existing empirical evidence on this point is mixed. Potential reasons for these conflicting results include differences in the level of economic development of the countries studied, different estimation methods and different measures of government transfers. By conducting a meta-analysis of 149 estimates reported in 23 studies, we sought to understand if - and if so, to what extent - government transfers are harmful to economic growth, as well as how important the abovementioned reasons are in explaining different findings in the literature. We found that government transfers are more detrimental to economic growth in developed countries compared to less-developed countries because such transfers can have a non-monotonic effect on growth. When government transfers are substantial, as they are in developed countries, they tend to reduce growth. We also found that the growth effects of government transfers are sensitive to the measurement of the transfers, i.e., studies that use unemployment benefits instead of social security tend to report a stronger negative growth effect.
Subject Economic Development and Growth
Keyword(s) Transfers
Welfare policy
Social security
Economic growth
DOI - identifier 10.1016/j.econmod.2017.03.030
Copyright notice © 2017 Elsevier B.V. All rights reserved.
ISSN 0264-9993
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Citation counts: TR Web of Science Citation Count  Cited 7 times in Thomson Reuters Web of Science Article | Citations
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