Assessment of the social expenditure impact on the economic growth in OECD countries

Abstract

Economic growth is exposed to many socio-economic factors that impact both the formation and allocation of resources. The theoretical part of this article discusses studies by various authors on the social expenditure impact on economic growth, the dependence of this influence on selected funding principles and social policy models. In the empirical part, using the Pooled Mean Group (PMG) procedure and the Fixed Effect Model, the impact of social expenditure on the economic growth in OECD countries is determined. An increased focus is put on assessing the long-term impact of the main types of social expenditures (public and private), based on different financing principles (distribution and accumulation), on the economic growth rates both in OECD in general and in the context of countries (based on the Esping-Andersen’s typology) grouped according to social policy models. The following conclusions are drawn: 1) an increase in the share of total social expenditures in the country’s GDP negatively affects economic growth; 2) an increase in the share of private social expenditures in the country’s GDP contributes to economic growth; 3) the obtained indicators of impact assessment are different depending on a social policy model chosen. The analysis is based on OECD panel data for the period 1980–2013.

The Impact of Social Expenditures on Income Inequality and Economic Growth in Türkiye: Fourier Adl Cointegration Analysis / Türkiye’de Sosyal Harcamaların Gelir Eşitsizliği ve Ekonomik Büyüme Üzerindeki Etkisi: Fourier Adl Eşbütünleşme Analizi

“…Çalışmanın sonucunda eğitim ve sağlık harcamalarının ekonomik büyüme üzerinde olumsuz; sosyal harcamaların ve gayri safi sermaye oluşumunun ise olumlu etkisi olduğu sonucuna varılmıştır. Malyovanyi vd. (2018), yapmış oldukları çalışmada OECD ülkeleri için, 1980-2013 dönemi ele alarak Havuzlanmış Ortalama Grup (PMG) yöntemi ve Sabit Etki Modeli kullanılarak sosyal harcamaların ekonomik büyümeye etkisini ele almışlardır.…”