ABSTRACT
Poverty is the leading problem that causes many economic, social and political issues. Therefore, measures to prevent poverty should be taken and the problems which are caused or will be caused by poverty should be alleviated. Social aids are one of the most widespread methods generally used by almost every society to fight the problem related to poverty. Social aids generally refer to goods and cash aids made by the state to meet the needs of the poor. The main aim of this study is to reveal the impact of social spending on poverty in OECD countries. In the study, the dataset of 36 OECD countries including Turkey for the years of 2000-2018 is used, which includes the data for social expenditure/GDP rate and as an indicator for poverty the %20 group which gets the least share from national income. In the analysis, the first generation unit root tests Im, Peseran, and Shin 2003 , Maddala and Wu 1996 , Choi 2001 were applied, one of the second generation unit root that the CADF test is used to test stationarity, and the LM Bootstrap Panel Cointegration test which developed by Westerlund and Edgerton 2007 is used to determine the long-term relationship between variables. After longterm coefficient estimates were made with FMOLS, error correction model was applied for short-term relationships. At the last stage, Dumitrescu and Hurlin 2012 Causality analysis was applied. As a result of the analysis, a statistically significant two-way relationship between social expenditures and poverty is found. Poverty decreases as welfare spending increases, poverty increases as welfare spending decreases. Among the countries studied, Japan, Sweden, Switzerland, Iceland, Denmark and Austria takes place near the top where the social expenditure/GDP variable have a high impact on poverty reduction. The main countries where the impact of social expenditure/GDP variable is low in poverty reduction are Slovenia, Slovak Republic, Turkey, Mexico and Lithuania
