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Public social spending

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Social expenditure is classified as public when general government (i.e. central administration, local governments and social security institutions) controls the financial flows. For example, sickness benefits financed by compulsory contributions from employers and employees to social insurance funds are considered "public", whereas sickness benefits paid directly by employers to their employees are classified as "private". For cross‐country comparisons, the indicator of social spending used here refers to public spending as a share of GDP. The spending flows shown here are recorded before deduction of direct and indirect tax payments levied on these benefits and before addition of tax expenditures provided for social purposes ("gross spending"). Spending by lower tiers of government may be underestimated in some federal countries. Private social spending, which is considerable in a number of countries such as Korea and Canada, is not considered here because of the considerably greater error in the data. The Gini coefficient is a measure of income inequality. Values range between 0 ‐ perfect equality ‐ and 1 ‐ all income goes to one person.
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Document Type: Review Article

Publication date: 2011-04-01

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