Volunteering, Welfare and Poverty: A Cross-National Analysis in OECD countries
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2025-07-04
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en
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In the fight against increasing relative poverty, institutions such as the welfare state are seen as promising tools; however, a high level of social capital within a country can also promote economic growth and thus contribute to poverty reduction. Informal institutions, i.e., norms and values, form the basis for social capital. This study follows the new approach to test whether an observable reduction in poverty rates can be identified when social capital is proxied by average active formal volunteering, as volunteering reflects prevailing norms of support and cooperation and may indicate altruistic behavior. There is much evidence to suggest that formal and informal institutions in a country are intertwined, so this study investigates the extent to which the relationship between social capital and relative poverty is moderated by the welfare state. Applying a two-stage least squares (2SLS) estimator on panel data spanning the years 2004 to 2024 for the 38 OECD countries, the study finds that a 1% increase in volunteering leads to a 0.063% decrease in poverty rates, while a 1% increase in the welfare state size reduces relative poverty by 0.44%. Although no significant direct interaction effect was found, the analysis shows that formal volunteering, too, can negatively affect poverty rates, representing country-level social capital.
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Faculteit der Managementwetenschappen