Ricerc@Sapienza

Do European countries differ in the efficiency of their welfare policies? And which factors can
account for such variability? To address these questions, we perform a two-stage efficiency
analysis. First, based on a composite output indicator for social protection expenditure, we
measure efficiency by means of the Free Disposable Hull and Data Envelopment Analysis
techniques. Second, we perform an econometric analysis to identify the factors that can be
associated to cross-country differences. We find that countries scoring higher efficiency have
higher education and GDP levels, a smaller population size, a lower degree of selectivity of their
welfare systems and a lower corruption level.