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Net Social Expenditure, 2005 Edition: More Comprehensive Measures of Social Support

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  • Willem Adema
  • Maxime Ladaique

Abstract

This is the 2005 edition of a Net Social Expenditure paper that contains information on net (after tax) public and private social expenditure. These indicators supplement the detailed historical information on gross (before tax) publicly mandated social expenditure in the OECD Social Expenditure Database by accounting for the varying roles of voluntary private social spending and the tax system on social policy across OECD countries. Government intervention through the tax system affects social spending as governments levy direct taxes and social security contributions on cash transfers, and indirect taxes on goods and services bought by benefit recipients. In addition, governments may award tax advantages similar to cash benefits and/or grant tax concessions aiming to stimulate the provision of private social benefits. Through compulsion and tax relief public policy contributes to private pension plans, and such arrangements are generally considered within the social domain. This document refines the methodological framework previously developed per earlier editions of net social expenditure and presents indicators based on a common questionnaire for twenty-three OECD countries for which information on taxation of benefits in 2001 is now available: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Korea, Mexico, the Netherlands, New Zealand, Norway, the Slovak Republic, Sweden, Spain, the United Kingdom and the United States. Accounting for the impact of the tax system and private social expenditure leads to a greater similarity in social expenditure to GDP ratios across countries and to a reassessment of the magnitude of welfare states. Usually, Denmark and Sweden are seen as the biggest social spenders. After accounting for the impact of taxation social expenditure to GDP ratios appear highest in France, Germany and Sweden. Ce document est l’édition 2005 du rapport sur les Dépenses sociales nettes (après imposition) publiques et privées. Ces indicateurs ont été développés afin d’apporter un supplément aux informations historiques détaillées des dépenses sociales publiques brutes (avant imposition) obligatoires disponibles dans la Base de données des dépenses sociales de l’OCDE (SOCX), en tenant compte des différentes fonctions des dépenses sociales privées volontaires et l’impact du système d’imposition sur les politiques sociales dans les pays OCDE. L'intervention des gouvernements au travers du système d’imposition a un impact sur les dépenses sociales. En effet, ils perçoivent à la fois des impôts directs et des cotisations de sécurité sociale sur les transferts en espèces, mais aussi des impôts indirects sur les marchandises et les services achetés par les bénéficiaires. De plus, les gouvernements peuvent accorder des déductions fiscales similaires à des prestations en espèces et/ou accorder des allégements fiscaux dans le but d’inciter les agents (instituts et/ou individus) privés à avoir recours aux assurances sociales. Par ces obligations et allègements fiscaux, les politiques publiques encouragent la couverture privée des risques ; de telles dispositions relèvent du domaine social. Ce document redéfinit le cadre méthodologique développé dans les éditions précédentes des dépenses sociales nettes, et présente des indicateurs issus d’un questionnaire envoyé à vingt-trois pays pour lesquels les informations sur l’imposition des prestations pour 2001 sont désormais disponibles : Allemagne, Australie, Autriche, Belgique, Canada, Corée, Danemark, Espagne, États-Unis, Finlande, France, Islande, Irlande, Italie, Japon, Mexique, Norvège, Nouvelle-Zélande, Pays-Bas, République tchèque, République slovaque, Royaume-Uni et Suède. L’ajustement « impôt et dépenses privées » montre une plus grande similitude en terme de dépenses sociales en pourcentage du PIB entre pays, et donne aussi une nouvelle vision de l’ampleur des états protecteurs. Habituellement, le Danemark et la Suède sont considérés comme les pays aux dépenses sociales les plus importantes. Après ajustement, ce sont ici la France l'Allemagne et la Suède qui apparaissent en tête.

Suggested Citation

  • Willem Adema & Maxime Ladaique, 2005. "Net Social Expenditure, 2005 Edition: More Comprehensive Measures of Social Support," OECD Social, Employment and Migration Working Papers 29, OECD Publishing.
  • Handle: RePEc:oec:elsaab:29-en
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    File URL: http://dx.doi.org/10.1787/358663135802
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    Cited by:

    1. Alber, Jens & Kohler, Ulrich, 2008. "The inequality of electoral participation in Europe and America and the politically integrative functions of the welfare state," Discussion Papers, Research Unit: Inequality and Social Integration SP I 2008-202, Social Science Research Center Berlin (WZB).
    2. Tangian, Andranik, 2006. "Monitoring flexicurity policies in Europe from three different viewpoints," WSI Working Papers 145, The Institute of Economic and Social Research (WSI), Hans-Böckler-Foundation.
    3. Nora Lustig, 2011. "Commitment to Equity Assessment (CEQ): A Diagnostic Framework to Assess Governments' Fiscal Policies Handbook," Working Papers 1122, Tulane University, Department of Economics.
    4. Lindbeck, Assar, 2006. "The Welfare State -- Background, Achievements, Problems," Working Paper Series 662, Research Institute of Industrial Economics.
    5. Luciano G. Greco, 2011. "Optimal Redistribution with Productive Social Services," Scandinavian Journal of Economics, Wiley Blackwell, pages 55-73.
    6. Tangian, Andranik S., 2005. "European welfare state under the policy "make work pay" : Analysis with composite indicators," WSI Working Papers 141, The Institute of Economic and Social Research (WSI), Hans-Böckler-Foundation.
    7. André Decoster & Jason Loughrey & Cathal O'Donoghue & Dirk Verwerft, 2011. "Microsimulation of indirect taxes," International Journal of Microsimulation, International Microsimulation Association, vol. 4(2), pages 41-56.
    8. Tangian, Andranik, 2009. "Six families of flexicurity indicators developed at the Hans Boeckler Foundation," WSI Working Papers 168, The Institute of Economic and Social Research (WSI), Hans-Böckler-Foundation.
    9. Shulruf, Boaz & O'Loughlin, Claire & Tolley, Hilary, 2009. "Parenting education and support policies and their consequences in selected OECD countries," Children and Youth Services Review, Elsevier, vol. 31(5), pages 526-532, May.
    10. Tangian, Andranik, 2006. "European flexicurity: concepts (operational definitions), methodology (monitoring instruments), and policies (consistent implementations)," WSI Working Papers 148, The Institute of Economic and Social Research (WSI), Hans-Böckler-Foundation.
    11. Irwin Garfinkel & Lee Rainwater & Timothy M. Smeeding, 2006. "A re-examination of welfare states and inequality in rich nations: How in-kind transfers and indirect taxes change the story," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(4), pages 897-919.
    12. Alber, Jens, 2009. "What the European and American welfare states have in common and where they differ: Facts and fiction in comparisons of the European social model and the United States," Discussion Papers, Research Unit: Inequality and Social Integration SP I 2009-203, Social Science Research Center Berlin (WZB).

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    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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