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AbstractIn line with the previous research, we confirm that welfare programmes in Hungary are poorly targeted in terms of socio‐economic status (SES). However, by adding age to our models, we demonstrate that even if the status is irrelevant in explaining access to social benefits and services, age is not. Applying simple regression techniques, we compare both the theoretical importance (based on regression coefficients) and the dispersion importance (using Shapley‐value decomposition of the R2) of age and SES in explaining the receipt of and contributions to both in‐kind and in‐cash benefits at the level of the general government in Hungary. We conclude that what appears to be a dysfunctional instrument in alleviating poverty and inequality in a univariate model is actually a channel of resource reallocation that connects working‐age people to children and to the elderly when the model includes two predictors.

There seems to be a general consent in the expert community that Hungarian social policy provides poorly targeted benefits and services that are prone to Mattheweffects. Our results confirm this observation but we also find that the data offer an alternative interpretation of what the Hungarian welfare state is actually doing. Instead of supporting the poor it reallocates resources from the working age population to children and elderly people. It functions as an intermediary between overlapping generations that seek to finance their lifecycle by exploiting the opportunity offered by the very overlap, the fact that contemporaries are of different age. In a cross-sectional framework we analyse reallocations by age and income simultaneously and assess the relative importance of these two variables in explaining the access and contribution to public benefits. Our data from 2010 (based on EU-SILC and the Household Budget Survey) covers public transfers (cash and in-kind) and both direct and indirect taxes. We compare the importance of age and income in explaining transfers and taxes in a regression-analysis framework by studying causal importance (comparing coefficients) and dispersion importance of the variables (using Shapley-value decomposition). We find that income is irrelevant in explaining access to benefits and services but age is important. On the contribution side, income proves as important as age. This qualifies our description of the Hungarian welfare system: it serves as a channel through which affluent people in their working age support people in inactive age of all income groups.

Intro -- Contents -- List of Figures -- List of Tables -- 1: Introduction -- References -- Part I: Inequality and Poverty in European Union -- 2: Disposable Income Inequality, Cohesion and Crisis in Europe -- 2.1 Introduction -- 2.2 The Dimensions of European Inequality -- 2.2.1 Divergence and Convergence5 -- 2.2.2 Regional Cohesion -- 2.2.3 National Inequality -- 2.2.4 European-Wide Inequality -- 2.3 The Development of European Inequality -- 2.4 Crisis and Inequality -- References -- 3: Drivers of Growing Income Inequalities in OECD and European Countries -- 3.1 Introduction -- 3.2 Level and Trends -- 3.2.1 How Unequal Are European Union and OECD Countries? -- 3.2.2 Has the Gap Between Rich and Poor Widened? -- 3.3 Key Drivers of Growing Inequalities -- 3.3.1 Changes in Working Conditions -- 3.3.2 Institutional Changes -- 3.3.3 Demographic and Societal Changes -- 3.3.4 Weaker Redistribution -- 3.4 What Can Policy Makers Do? -- References -- 4: Unemployment, Precariousness and Poverty as Drivers of Social Inequality: The Case of the Southern European Countries -- 4.1 Introduction: Inequalities Are Multidimensional and Systemic -- 4.2 Income Inequality in the European Union -- 4.2.1 Economic Strain Versus Economic Well-Being -- 4.3 Employment, Unemployment and Precarious Work: The Case of Southern Countries -- 4.4 Final Remarks -- References -- 5: Distributional and Categorical Inequalities in Europe: Structural Configurations -- 5.1 Introduction -- 5.2 Multiple Inequalities and Structural Intersections in the European Social Space -- 5.3 Structural Configurations of Inequality in Europe -- 5.4 Conclusion -- References -- 6: Income Poverty in the EU: What Do We Actually Measure? Empirical Evidence on Choices, Underlying Assumptions and Implications (Based on EU-SILC 2005-2014)