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Public Social Expenditures and Economic Growth: Evidence from Selected OECD Countries

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  • F. Ozlem Alper
  • Mehmet Demiral

Abstract

There is a longstanding debate on whether the government expenditures contribute to economic growth. The endogenous growth theories, in general, predict that effective public expenditures can lead to increases in economic growth trends of countries regardless of their development stages or income levels. Starting from this prediction, this study aims to investigate the effects of governments¡¯ social expenditure proxies namely education, health and social spending on economic growth performances presented by the changes in the gross domestic product (GDP) per capita. Using the feasible generalized least squares (FGLS) estimators based on a balanced panel dataset covering 2002-2013 periods of 18 OECD countries, the study concludes that social expenditures in all three dimensions significantly contribute to the economic growth. Overall results underline that public expenditures can be productive as an investment in the case of selected OECD countries.

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  • F. Ozlem Alper & Mehmet Demiral, 2016. "Public Social Expenditures and Economic Growth: Evidence from Selected OECD Countries," Research in World Economy, Research in World Economy, Sciedu Press, vol. 7(2), pages 44-51, December.
    • Handle: RePEc:jfr:rwe111:v:7:y:2016:i:2:p:44-51
    DOI: 10.5430/rwe.v7n2p44
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    Cited by:

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    2. Martina Halaskova & Renata Halaskova & Viktor Prokop, 2018. "Evaluation of Efficiency in Selected Areas of Public Services in European Union Countries," Sustainability, MDPI, vol. 10(12), pages 1-17, December.
    3. Ioan-Cătălin Murăraşu & Răzvan Bujor, 2022. "The Energy Crisis as a Factor of Aggravating Poverty in Bulgaria and Romania. State's Social Expenditures Evolution," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 25(84), pages 95-103, December,.
    4. Zarish Riaz & Uzma Nisar, 2022. "Impact of Human Capital and Social Capabilities on Economic Growth of Pakistan: A Time Series Analysis," Journal of Education and Social Studies, Science Impact Publishers, vol. 3(1), pages 18-30.
    5. Roosemarina Anggraini Rambe & Purmini Purmini & Armelly Armelly & Lizar Alfansi & Ratu Eva Febriani, 2022. "Efficiency Comparison of Pro-Growth Poverty Reduction Spending before and during the COVID-19 Pandemic: A Study of Regional Governments in Indonesia," Economies, MDPI, vol. 10(6), pages 1-14, June.
    6. Manoj Panda & Samraj Sahay, 2020. "Determinants of Economic Growth across States in India," IEG Working Papers 399, Institute of Economic Growth.
    7. Najam Ul Hassan & Safdar Hussain & Abdul Saboor & Muhammad Hanif, 2023. "Nexus Among Human Capital, Public Expenses and Economic Growth: Empirical Evidence from Developing World," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(3), pages 485-492.

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