Multidimensional welfare comparisons of EU member states before, during, and after the financial crisis: a dominance app
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Multidimensional welfare comparisons of EU member states before, during, and after the financial crisis: a dominance approach M. Azhar Hussain1,2 · Nikolaj Siersbæk3 · Lars Peter Østerdal4 Received: 2 August 2018 / Accepted: 3 May 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract How did the EU states’ populations fare during the financial crisis in key dimensions such as income, health, and education? We seek to answer this question by way of welfare comparisons between countries and within countries over time, using EUSILC data. Our study is novel in implementing a multidimensional first order dominance (FOD) comparison approach on the basis of multi-level indicators. FOD only requires that outcomes can be ranked from worse to better within each dimension and is therefore suitable for the analysis of multidimensional ordinal data. We find that the countries most often dominated are southern and eastern European member states, and the dominant countries are mostly northern and western European member states. However, for most country comparisons, there is no dominance relationship. Moreover, only a few member states have experienced a temporal dominance improvement in welfare, while no member states have experienced a temporal dominance deterioration during the financial crisis.
Financial support from the Independent Research Fund Denmark (Grant-ID: DFF-6109-000132) is gratefully acknowledged. * Nikolaj Siersbæk [email protected] 1
College of Business Administration, University of Sharjah, PO Box 27272, Sharjah, UAE
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Department of Social Sciences and Business, Roskilde University, Universitetsvej 1, 4000 Roskilde, Denmark
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Department of Business and Economics, University of Southern Denmark, Campusvej 55, 5230 Odense M, Denmark
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Department of Economics, Copenhagen Business School, Porcelænshaven 16A, 2000 Frederiksberg, Denmark
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M. A. Hussain et al.
1 Introduction The recent financial and economic crisis has had a major impact on EU member states. The effects on key macroeconomic indicators at the country level such as GDP growth, public debt, inflation, etc. have been widely analyzed (e.g., European Commission 2009). It has also been shown that the financial and economic crisis has affected income at the individual level (e.g., De Beer 2012). However, it has long been recognized that welfare is a multidimensional phenomenon, which is not adequately measured by income (e.g., Sen 1970, 1976; Arrow 1971; Kolm 1977), and much less is known regarding the impact of the crisis on welfare when taking a multidimensional view. Two questions are examined in this paper: How did the EU member states compare in terms of multidimensional welfare in the years of the financial crisis? Has multidimensional welfare improved or deteriorated for each state during the crisis? Previous multidimensional welfare comparisons of European countries have mostly used methods that rely on a priori assumptions about the relative importance of different dimensions of w
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