Ovidius University Annals: Economic Sciences Series (Jan 2017)
The Statistical Analysis of the Relationship Between Poverty and Public Expenses in the European Union Countries
Abstract
The 2020 Europe strategy has among its objectives the reduction of poverty. This study aims to observe if the European Union countries distribute and perform the public expenses by state functions so that it influences the reduction of poverty. The study also tackles the identification of the types of public expenses by state functions which have the greatest effect in the poverty reduction. The analysis is performed on 27 of the 28 countries of the European Union. The variables for Cyprus have extreme values and that is why this country has been excluded from the analysis. The results obtained confirm that in 2015, the expenses performed by state functions have a significant influence on poverty reduction. The greatest influence is held by the expenses for social protection and they are followed by the health care, business and education-related expenses. Thus, the EU countries should distribute their public expenses prevalently towards these state functions in order to minimize poverty.
