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Long-run effects of public expenditure on poverty
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Household characteristics may have long-run effects on individual outcomes in
adulthood. For instance, individuals who lived when young in households experiencing
financial problems are more likely to be poor when adults. Governments try to reduce
these effects and to promote equality of opportunity. The objective of this paper is to check
whether public expenditure has a long-run effect in reducing the probability of being poor
when adult, and to what extent. Our main finding is that public expenditure on education
has a strong long-run effect on reducing incidence of poverty in adulthood. We also find
that this effect is concentrated mainly among individuals who have parents with a low level
of education.
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