Yesterday I posted about the effect of tax and transfer programs on poverty reduction across 34 OECD countries. Across the OECD, transfer programs play a massive role in reducing poverty, a bigger role than perhaps any other factor. I put together this animation to hopefully illustrate even more clearly the amount of poverty being reduced by transfers.

Before you start the animation, the dots are lined up according to pre-transfer poverty rates. The bluer the dot is, the less pre-transfer poverty there is. The redder the dot is, the more pre-transfer poverty there is. When you click play, the dots move towards the right in accordance with the amount of poverty being reduced by transfers. The dots eventually wind up at the post-transfer poverty rate (vertical axis) and at the amount of poverty reduced by transfers (horizontal axis). The poverty rate being tracked here comes from the late-2000s OECD data, and the poverty line is set at 40% of a country’s median income.

Unfortunately, the timeline is labeled as going from 1900 to 1901. That is due to a software limitation which does not allow non-date labels. The 1900 number is pre-transfer, and the 1901 number is post-transfer. You can click on the top right to see line graphs and bar graphs of the same data. The bar graph animation is interesting if you click a few of the countries in the box on the right to track. You can see where the country ranks in pre-transfer poverty rates, and then you can see where the country ranks post-transfers.

The animation seems to show that countries with low poverty primarily get that way through tax and transfer programs. That does not necessarily mean it is the only way to get there, but it is certainly a proven way to do so.