OECD: social spending remains at ‘historic high’

24 Nov 14
Government social spending remains at historically high levels in many developed countries more than five years on from the financial crisis, an examination by the Organisation for Economic Cooperation and Development has found.

By | 24 November 2014

Government social spending remains at historically high levels in many developed countries more than five years on from the financial crisis, an examination by the Organisation for Economic Cooperation and Development has found.

In an update to the economic think-tank’s Social Expenditure Database, it found spending on benefits, pensions, other social payments and healthcare was now projected to be above one quarter of gross domestic product in 9 of its 34 member countries in 2014.

Social spending in France was highest at 32%, with Denmark, Belgium and Finland 25%. The average across the OECD was 22%.

However, the figures also showed that Canada, Estonia, Germany, Greece, Hungary, Iceland, Ireland and the UK had all experienced substantial falls in spending as a percentage of output from the peak of the crisis in 2009. Reductions in spending of at least 1.5 percentage points have been recorded in all cases.

But spending across social and health services remains above the pre-crisis levels in all but one OECD country. Spending in Hungary is lower by almost one percentage point than in 2007, while Canada, Germany and Israel are within one percentage point.

Across the OECD, countries generally spent more on cash benefits (12.3% of GDP) than on social and health services (8.6%), but Nordic countries, Canada, the Netherlands, New Zealand and the UK had a more equal balance in spending on cash and in-kind benefits.


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