Public and private financial assistance in Europe

Abstract:

This analysis uses the European Union Statistics on Income and Living Conditions data for 2006–2011 to examine whether there is an identifiable relationship between public and private provision of financial assistance and whether increased public support is associated with receiving more or less private support. In line with previous research, the findings suggest that households in receipt of certain public financial assistance are more likely to receive financial assistance from their friends and family. Yet the paper goes further and argues that the effect is dependent on the nature of the policy. Specifically, active policies not related to previous labour market participation appear to be associated with greater financial assistance from friends and family compared to traditional, passive forms of welfare assistance which themselves show no effect. The paper therefore concludes that the association between private and public financial assistance is dependent upon the type of public assistance that is being considered.