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Fighting Poverty in America

The US is a global outlier in tying much of its social safety net to employment, with social-welfare spending averaging just 16% of GDP, compared to 23% in Europe. With inequality and income distribution looming large in the run-up to November’s presidential and congressional elections, it's time for the US to assess what works.

BERKELEY – From 2005 to 2014, the real income of two-thirds of households in 25 developed economies was flat or fell. Only after very aggressive government intervention in taxes and transfers have some countries been able to hold families at least even.

This experience holds lessons for countries like the United States, where inequality and income distribution loom large in the run-up to November’s presidential and congressional elections. What can the US learn from what works?

The US is a global outlier in tying much of its social safety net to employment. Social-welfare spending averages 23% of GDP in Europe, but only 16% in the US. And the US is an especially distant outlier when it comes to families: only three other countries – Tonga, Suriname, and Papua New Guinea – lack a national policy on paid family leave.

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