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Inception Workshop on SPI Update, Asian Development Bank, Manila, 3-4 April 2014
Willem Adema
Senior Economist, Social Policy Division, OECD
SomeindicatorsontheWelfareStateand
thecrisis
Public social cash transfers: pensions are the main spending item, often increasing in size
Social expenditure, cash transfers, in % of GDP, early 1990s and 2009
A. Cash pensions, old age and survivors 15 2009 10 5 0 Early 1990s
Populations are ageing and the old-age support ratio will halve in the OECD
Source: OECD (2011), Pensions at a Glance, OECD Publishing, Paris (www.oecd.org/els/social/pensions/PAG); United Nations, World Population Prospects - 2008 Revision.
Greece France Germany OECD-28 Netherlands Sweden United Kingdom Korea Australia United States
13.6 14.6 10.8 8.4 6.8 9.6 7.7 0.9 3.6 4.6 0 2 4 6 8
Source: OECD (2012), OECD Pensions Outlook 2012, OECD Publishing, www.oecd.org/daf/pensions/outlook.
Public spending on in-kind benefits: health is the main area but other services have expanded
Social expenditure, in percentage of GDP, early 1990s and 2009
A. Health
15 2009 10 Early 1990s
Health spending in % GDP increased, most notably around 2008/9, but it has stabilised
Total health expenditure as a % of GDP
Source OECD Statistics, 2013Source: OECD Health Statistics 2013 Source: Health OECD Health Statistics 2013
SomeindicatorsontheWelfareStateand
thecrisis
The impact of the crisis on social spending trends varies across countries
Annual growth in real public social spending and real GDP, Index 2007= 100 (left scale and public social spending as a % GDP (right scale), 2007-2013
% Australia Public social spen ding as a % GDP (right scale) Real GDP France Real public social spending GDP Deflator
35 30 25 20 15 10 5
150 140 130 120 110 100 90 80 70 2007 2008 2009 2010 2011 2012 2013
35 30 25 20 15 10 5
United States %
150 140 130 120 110 100 90 80 70 2007 2008 2009 2010 2011 2012 2013
35 30 25 20 15 10 5
150 140 130 120 110 100 90 80 70 2007 2008 2009 2010 2011 2012 2013
35 30 25 20 15 10 5
and Greece and Ireland were among the countries most affected
Annual growth in real public social spending and real GDP, Index 2007= 100 (left scale and public social spending as a % GDP (right scale), 2007-2013
Ireland United Kingdom France Denmark Sweden Germany Australia Israel United States Korea
3.0 3.6 3.7 3.5 3.4 2.7 2.5 2.1 0.0 1.2 0.4 0.7 0.3 0.3 0.2
Note: Public support accounted here only concerns public support that is exclusively for families (e.g. child payments and allowances, parental leave benefits and childcare support). Spending recorded in other social policy areas as health and housing support also assists families, but not exclusively, and is not included here. In Federal countries, as for example Canada, Switzerland and the United States, childcare spending by local governments is not necessarily reported to Federal governments. For these countries indicators underestimate the extent of public spending on childcare. Source: OECD Social Expenditure database, preliminary data (SOCX, www.oecd.org/els/social/expenditure).
The number of recipients of primary out-of-work benefits have increased during the crisis
Panel A. Participation: Number of recipients of cash transfers as a percentage of the 15-64 population
Unemployment insurance
6 5 4 3 5.6 4.7 4.6
4.4
Unemployment assistance
2 1 0 -1 0
4.1
Portugal Canada Czech Republic Netherlands Sweden New Zealand Italy Germany
1.3 0.9 0.8
2.0 1.9
Social assistance
5 8.9 8.7 6.4 4.2 2.3 2.3 4 3 2 1
Lone parents
0
United States Ireland Germany Spain New Zealand Australia Sweden France Portugal Czech Republic Netherlands Japan Chile Italy
Fiscal space for greater social investment is narrowing in countries with high unemployment
Notes: See notes to Figure 9. Averages for 2007/8 and 2011/12 are used as the timing of the downturn and the beginning of any fiscal consolidation efforts varied across countries. Consolidation effort: change in underlying primary government balance, percentage points of GDP. Source: OECD, 2014, Society at a Glance, http://www.oecd.org/els/societyataglance.htm.
Concluding remarks
SocialspendingtoGDPratioshaveincreasedwiththeoutbreak
ofthecrisis,withoutmarkeddeclinesofar.
Pensionsandhealthexpendituretrendshavecontributedtoa
structuralupwardincreaseinsocialspendingovertime. However,
Pensionreformwillmitigatetheupwardpressureonsocialspendingdue
topopulationageing
Cutsingovernmenthealthspendinghavecontributedtoalmostall
OECDcountriesexperiencingafallionhealthspendinggrowthsince2009
Allsectorsexperiencedsignificantreductions;especiallypharmaceuticals
andprevention
Fiscalspaceforgreatersocialinvestmentisnarrowingin
countriesthatsawasteepriseinemploymentduringthecrisis.
OECD,2014,SocietyataGlance,
http://www.oecd.org/els/societyataglance.htm
TheOECDSocialExpendituredatabase isaccessiblevia
www.oecd.org/els/social/expenditure
OECDSocial,EmploymentandMigrationWorkingPapers,No.124:Isthe
EuropeanWelfareStateReallyMoreExpensive?IndicatorsonSocialSpending, 19802012;andaManualtotheOECDSocialExpenditureDatabase(SOCX). http://www.oecd.org/els/listofsocialemploymentandmigrationworkingpapers.htm
OECDHealthPoliciesandData
http://www.oecd.org/health/healthsystems/healthstatistics.htm