Archive:Social protection statistics - main indicators
- Data from March 2011. Most recent data: Further Eurostat information, Main tables and Database. Planned article update: September 2016.
Social protection systems are highly developed in the European Union (EU): they are designed to protect people against the risks associated with unemployment, parental responsibilities, health care and invalidity, the loss of a spouse or parent, old age, housing and social exclusion.
This article examines differences in EU Member States' social protection expenditure, expressed among other things as a percentage of GDP and on a per-capita basis.
Main statistical findings
In 2008 gross expenditure on social protection in EU-27 accounted for 26.4 % of GDP (Figure 1).
Social protection benefits are the largest component of total gross social protection expenditure. In 2008 they represented 25.3 % of GDP in the EU-27. Between them, old-age and survivors benefits predominated, representing 11.5 % of GDP. Between 2007 and 2008, in the EU-27 expenditure on social protection as a percentage of GDP rose by 0.7 percentage points. This was the result of an increasing rate of growth for social protection expenditure (in nominal terms) combined with a decreasing rate of growth for GDP.
Over the period 2001-2008 social protection benefits in the EU-27 grew in real terms by 2.3 % per year on average; sickness/health care (+2.9 % per year) and housing and social exclusion combined (+3.2 % per year) were the functions that grew most rapidly on average. The financing of social protection in the EU-27 in 2008 favoured social security contributions (57.5 % of total receipts) over general government funding (38.2 % of total receipts). In 2008, gross expenditure on social protection (see definition in the methodological notes) accounted for 26.4 % of GDP in the EU-27 and 27.5 % in the EA-16 (Figure 1). There are significant differences between countries in the level of expenditure on social protection. France (30.8 %), Denmark (29.7 %) and Sweden (29.4 %) spent a large proportion of their GDP on social protection; Latvia (12.6 %) and Romania (14.3 %) were the countries with the lowest ratios between social protection expenditure and GDP
Per-capita expenditure on social protection (in PPS)
In order to compare per-capita social protection expenditure across the EU, figures are expressed in terms of purchasing power standards (PPS). In 2008 per-capita social protection expenditure was 6 604 PPS in the EU-27 and 8 108 PPS in the euro area (Figure 2). As for expenditure as a percentage of GDP (Figure 1), there are also pronounced differences between countries in expenditure per capita. Of all the EU countries, Luxembourg1 had the highest expenditure in 2008 (14 057 PPS per capita), followed by the Netherlands and Sweden (with more than 9 000 PPS per capita). The values for the countries with the largest per-capita expenditure (Luxembourg excluded) were roughly six to eight times the values in the group of EU countries with the lowest expenditure, i.e. Bulgaria, Romania and Latvia (with values between 1 661 and 1 803 PPS per capita). Of the countries outside the EU-27 expenditure is highest in Norway (10 642 PPS), surpassed only by Luxembourg. Differences between countries in terms of the level of expenditure are partly related to differing levels of wealth, but they also reflect diversity in social protection systems, demographic trends, unemployment rates and other social, institutional and economic factors.
Per-capita expenditure on social protection (in PPS) and expenditure as percentage of GDP
There is a positive correlation between the expenditure on social protection expressed as a percentage of GDP and in PPS per capita (Figure 3); In general, the relative position of a country with respect to the European aggregates is maintained with both variables. The main exceptions within the EU were Ireland (fairly low level in terms of % of GDP) and Luxembourg (higher level in terms of PPS). The level of expenditure per person was relatively homogeneous within the group of countries (Latvia, Estonia, Romania, Lithuania, Bulgaria and Slovakia) having the lowest levels of GDP devoted to social protection (the countries below the level of 16.2% in the graph) and within the group (Italy, Germany, Switzerland, Austria, Netherlands, Denmark, Belgium, Sweden and France) with the highest levels (the countries above the line at 26.3 %, which is the value for EU-27). Nevertheless, the level of expenditure per person (expressed in PPS) showed greater variation in the case of countries that tended to have a low-to-medium level of expenditure as a percentage of GDP directed to social protection (between 16.2% and 26.3%). In this third group, even though the countries had a similar level of expenditure in terms of GDP, their levels of per-capita expenditure (expressed in PPS) showed bigger differences than in the previous two groups (horizontal reading of Figure 3). The relative position of countries in this group should be considered in the light of different combinations of total levels of expenditure on social protection and per-capita GDP.
Social protection expenditure compared with rate of change of GDP and expenditure
As Figure 4 shows, the contraction in social protection expenditure as a percentage of GDP since 2003 for the EU-27 was due to the fact that nominal GDP had risen faster than nominal expenditure; this changed between 2007 and 2008, when GDP growth slowed down significantly and was overtaken by the increasing rate of change of expenditure.
Evolution of social protection expenditure as percentage of GDP
In the EU-27 and euro area (EA-16), expenditure on social protection as percentage of GDP rose continuously between 2001 and 2003 (Table 1). From 2003 onwards, the ratio remained fairly stable until 2005; thereafter it contracted significantly in 2006, and even more so in 2007.
It was only between 2007 and 2008 that there was a new increase: 0.7 percentage points for both aggregates. From 2002, expenditure on social protection as a percentage of GDP in the EU-27 was about 0.5 – 0.6 percentage points lower than in the euro area (EA-16); this divergence reached 1.1 percentage points in 2007 and 2008.
The difference throughout the whole period can be attributed to the fact that EU-27 includes a number of non-euro countries with low values for the ratio; in most cases these are countries that continued to show strong GDP growth during that period (i.e. the Baltic countries, Bulgaria, and Romania).
Growth of per-capita expenditure at 2000 constant prices
There is an increase in social protection expenditure over the whole period under review for the EU-27 and EA-16, when the time series is expressed in terms of per-capita expenditure in euros at constant prices. Table 2 shows the rates of growth over the period 2001-2008.
Between 2001 and 2008, per-capita expenditure on social protection at constant prices rose in the EU-27 at an average annual rate of 1.7 %. The average calculated over the same period in the EA-16 was higher (2 %).
The yearly average rate of change for the EU-27 depends mainly on changes in Germany, France, Italy and the United Kingdom since these four countries together account for nearly 70 % of the EU total. Among them, Germany recorded the lowest average growth rate across the whole of EU.
Different systems of financing
In 2008, the main sources of funding of social protection at EU-27 level (Table 3) were social contributions, which accounted for 57.5 % of all receipts and general government contributions from taxes (38.2 %). Social contributions can be broken down into contributions paid by the protected persons (employees, self-employed persons, retired persons and others) and those paid by employers.
The European average for 2008 masks major national differences in the structure of social protection funding. In Estonia and the Czech Republic more than 70 % of all receipts were funded by social contributions. Denmark and Ireland, on the other hand, financed their social protection systems largely from taxes, which accounted for over 50 % of total receipts. Sweden, the United Kingdom, Cyprus and Luxembourg were also heavily dependent on general government funding (over 45 %).
The share of ‘other receipts’ (including property income) was low in 2008: 4.3 % for the EU-27. However, the share in Poland, Cyprus, the Netherlands and Greece was well over 10 %.
These differences are historical and stem from the institutional rationales underpinning social protection systems. Northern European countries, where government funding predominates, are steeped in the ‘Beveridgian’ tradition (where it is sufficient to be a resident in need in order to be eligible for social benefits). Other countries are strongly attached to the ‘Bismarckian’ tradition, which is based on the insurance concept (in the form of contributions).
Nevertheless, in some countries the structure changed over time (relative to the year 2001) and following different patterns. Bulgaria, Romania, Belgium and Malta have substantially increased their share of government funding. Normally this is combined with a reduction in social contributions; in Bulgaria and Romania, it has also been associated with a reduction in ‘other receipts’. A considerable change in favour of social contributions as against government contributions has been observed in the Czech Republic, Estonia and Slovenia. The share of ‘other receipts’ increased by less than 1 percentage point in EU-27. They decreased, or remained more or less stable, in a number of countries. Where there was an increase, this was due to a loss of funding from tax revenue in Ireland and Slovakia and of social contributions in Poland and the United Kingdom.
Data sources and availability
Figures are collected from national statistical institutes or/and ministries of social affairs. Most of the data are compiled from administrative souurces.
For more detailed information, please refer to the consolidated quality reports.
Context
The European system of integrated social protection statistics was jointly developed in the late 1970s by Eurostat and representatives of EU Member States in response to the need for a specific instrument for statistical observation of social protection in the EC Member States.
ESSPROS is a common framework allowing international comparison of the administrative national data on social protection. It provides a coherent comparison between European countries of social benefits to households and their financing.
ESSPROS is composed of the core system and of modules. The core system contains annual data (starting from the year 1990) collected by Eurostat on:
- Quantitative data: social protection receipts and expenditures by schemes (a distinct body of rules, supported by one or more institutional units, governing the provision of social protection benefits and their financing);
- Qualitative database: metadata by scheme and detailed benefit.
The receipts of social protection schemes are classified by type and origin. The type gives the nature of, or the reason for a payment: social contributions, general government contributions, transfers from other schemes and other receipts; the origin specifies the institutional sector from which the payment is received: all resident institutional units (corporations, general government, households, non-profit institutions serving households) and the rest of the world.
The expenditure of social protection is classified by type, indicating the nature of, or the reason for, the expenditure: social protection benefits, administration costs, transfers to other schemes and other expenditure. Social protection benefits are transfers to households, in cash or in kind, intended to relieve them from the financial burden of a number of risks or needs. The risks or needs of social protection included in ESSPROS are disability, sickness/healthcare, old age, survivors, family/children, unemployment, as well as housing and social exclusion not elsewhere classified. The modules contain supplementary statistical information on particular aspects of social protection: they relate to the beneficiaries of pensions and to net social benefits.
The annual data collection for the module on pensions' beneficiaries was launched in 2008.
The pilot collection, with a view to introducing a module on net social protection benefits from 2010, was also launched in 2008.
See also
Further Eurostat information
Publications
Main tables
- Social protection, see:
- Social protection (t_spr)
- Total expenditure on social protection (tps00098)
- Total expenditure on social protection per head of population. ECU/EUR (tps00099)
- Total expenditure on social protection per head of population. PPS (tps00100)
- Total expenditure on social protection by type (tps00101)
- Total expenditure on social benefits (tps00102)
- Total expenditure on administration costs (tps00104)
- Other expenditure on social protection (tps00105)
- Social benefits by function (tps00106)
- Social benefits per head of population by function (tps00107)
- Expenditure on pensions (tps00103)
- Expenditure on care for elderly (tsdde530)
- Social protection receipts by type (tps00108)
Database
- Social protection, see:
- Social protection (spr)
- Social protection expenditure (spr_expend)
- Expenditure: main results (spr_exp_sum)
- Pensions (spr_exp_pens)
- Expenditure - Tables by functions, aggregated benefits and grouped schemes, in currency (spr_exp_cur)
- Tables by functions, aggregated benefits and grouped schemes - in MIO of national currency (spr_exp_nac)
- Tables by functions, aggregated benefits and grouped schemes - in MIO of EUR (spr_exp_eur)
- Tables by functions, aggregated benefits and grouped schemes - in MIO of PPS (spr_exp_pps)
- Tables by functions, aggregated benefits and grouped schemes - in PPS per head (spr_exp_ppsh)
- Tables by functions, aggregated benefits and grouped schemes - in % of the GDP (spr_exp_gdp)
- Expenditure - Tables by benefits, by function (spr_exp_func)
- Tables by benefits - sickness/health care function (spr_exp_fsi)
- Tables by benefits - disability function (spr_exp_fdi)
- Tables by benefits - old age function (spr_exp_fol)
- Tables by benefits - survivors function (spr_exp_fsu)
- Tables by benefits - family/children function (spr_exp_ffa)
- Tables by benefits - unemployment function (spr_exp_fun)
- Tables by benefits - housing function (spr_exp_fho)
- Tables by benefits - social exclusion n.e.c. function (spr_exp_fex)
- Tables by benefits - all functions (spr_exp_fto)
- Social protection receipts (spr_receipts)
- Receipts by type (spr_rec_sumt)
- Receipts by sector of origin (spr_rec_sums)
- Receipts - Tables by sector of origin and type, in MIO of national currency (including 'euro fixed' series for euro area countries) (spr_rec_nac)
- Receipts - Tables by sector of origin and type, in MIO of EUR (spr_rec_eur)
- Receipts - Tables by sector of origin and type, in % of the GDP (spr_rec_gdp)
- Social protection expenditure (spr_expend)
Dedicated section
Methodology / Metadata
Other information
- Regulation (EC) No 458/2007 of 25 April 2007 on the European system of integrated social protection statistics (ESSPROS)
- Regulation (EC) No 1322/2007 of 12 November 2007 implementing Regulation (EC) No 458/2007 as regards the appropriate formats for transmission, results to be transmitted and criteria for measuring quality for the ESSPROS core system and the module on pension beneficiaries
- Regulation (EC) No 10/2008 of 8 January 2008 implementing Regulation (EC) No 458/2007 as regards the definitions, detailed classifications and updating of the rules for dissemination for the ESSPROS core system and the module on pension beneficiaries