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Is the European Welfare State Really More Expensive?: Indicators on Social Spending, 1980-2012; and a Manual to the OECD Social Expenditure Database (SOCX)

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  • Willem Adema
  • Pauline Fron
  • Maxime Ladaique
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    Abstract

    Part I of this paper first presents information on trends and composition of social expenditure as in the OECD Social Expenditure database for the years 1980 – 2007. Over this period, public social expenditure as a percentage of GDP, on average across OECD, increased from 15.6% to 19.2%. Public pension spending (6.4% of GDP) and public health expenditure (5.8% of GDP) are the largest social spending items. Part I also presents social expenditure indicators that account for the effects of the tax system as well as indicators on private social expenditure. Including both of these features alters country rankings by level of social spending and leads to a convergence of spending-to-GDP ratios across countries. Based on this broader measure net total social expenditure as a percent of GDP at factor costs in 2007 was highest in France and Belgium, at 30% of GDP, and between 22 and 28% of GDP in Austria, Canada, Denmark, Finland, Italy, Japan, the Netherlands, Portugal, the United Kingdom and the United States. Part II of this paper presents the OECD SOCX Manual. It starts with a discussion of methodological, classification and data issues regarding the gross spending items as in SOCX. It also looks at the methodological aspects of measuring net social expenditure, and presents information on how relevant estimates were derived. Accounting for the effect of the tax system and private social expenditure leads to greater similarity in social expenditure-to-GDP ratios across countries and to a reassessment of the magnitude of welfare states. After accounting for the impact of taxation and private benefits, social expenditure amounts to over 30% of GDP at factor cost in Belgium and France; social expenditure also ranges within a few percentage points of each other in Austria, Canada, Denmark, Finland, Italy, Japan, the Netherlands, Portugal, the United Kingdom and the United States. La Partie I de ce document présente tout d'abord des informations sur les tendances et la composition des dépenses sociales issues de la base de données OCDE sur les dépenses sociales pour les années 1980 - 2007. Durant cette période, les dépenses sociales publiques en pourcentage du PIB ont augmenté en moyenne de 15,6% à 19,2% dans les pays de l'OCDE. Les dépenses de retraite publiques (6,4% du PIB) et les dépenses de santé publique (5,8% du PIB) sont les plus grandes catégories de dépenses sociales. La Partie I présente également des indicateurs de dépenses sociales tenant compte des effets du système fiscal et ainsi que des indicateurs sur les dépenses sociales privées. La prise en compte de ces deux effets modifie le classement des pays selon le niveau de dépenses sociales et conduit à une convergence des ratios entre les niveaux des dépenses sociales et le PIB entre les pays. Basées sur cette mesure plus large, les dépenses sociales totales nettes en pourcentage du PIB aux coûts des facteurs atteignent 30% du PIB en 2007 pour les plus élevées, en France et en Belgique, et varient entre 22 et 28% du PIB en Autriche, au Canada, au Danemark, en Finlande, en Italie, au Japon, aux Pays-Bas, au Portugal, au Royaume-Uni et aux États-Unis. La Partie II de ce document présente le manuel SOCX de l'OCDE, avec tout d’abord une discussion sur des questions méthodologiques, sur la classification des dépenses brutes telles que présentées dans SOCX. Les aspects méthodologiques de la mesure de dépenses sociales nettes sont ensuite présentés, notamment avec des informations sur la façon dont les estimations ont été dérivées. La prise en compte des prestations sociales privées et de l’impact de la fiscalité sur les dépenses sociales a pour effet d’égaliser les ratios entre les niveaux des dépenses sociales et le PIB. Après la prise en compte des prestations sociales privées et de l’impact de la fiscalité, les dépenses sociales atteignent plus de 30% du PIB aux coûts des facteurs en Belgique et en France ; enfin les écarts entre les dépenses sociales en Autriche, Canada, Danemark, Finlande, Italie, Japon, Pays-Bas, Portugal, Royaume-Uni et aux États-Unis ne sont que de quelques points de pourcentage.

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    File URL: http://dx.doi.org/10.1787/5kg2d2d4pbf0-en
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Social, Employment and Migration Working Papers with number 124.

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    Date of creation: 02 Nov 2011
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    Handle: RePEc:oec:elsaab:124-en

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    Keywords: tax breaks with a social purpose; taxation of benefit income; public welfare system; social policy; economic crisis; private social benefits;

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    Cited by:
    1. Fabrizio Coricelli & Riccardo Fiorito, 2013. "Myths and Facts about Fiscal Discretion: A New Measure of Discretionary Expenditure," Working Papers LuissLab 13106, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    2. Marx, Ive & Nolan, Brian & Olivera, Javier, 2014. "The Welfare State and Anti-Poverty Policy in Rich Countries," IZA Discussion Papers 8154, Institute for the Study of Labor (IZA).
    3. Randall S. Jones & Satoshi Urasawa, 2012. "Promoting Social Cohesion in Korea," OECD Economics Department Working Papers 963, OECD Publishing.
    4. Bruno Palier & Clément Carbonnier & Michaël Zemmour, 2014. "Tax cuts or social investment? Evaluating the opportunity cost of the French employment strategy," Sciences Po publications 31, Sciences Po.

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