Archive:Social protection statistics

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Data from September 2012. Most recent data: Further Eurostat information, Main tables and Database.

This article analyses recent statistics on social protection in the European Union (EU). Social protection encompasses interventions from public or private bodies intended to relieve households and individuals of the burden of a defined set of risks or needs, provided that there is neither a simultaneous reciprocal nor an individual arrangement involved.

Main statistical findings

Social protection expenditure in the EU-27 was equivalent to 29.5 % of gross domestic product (GDP) in 2009 (see Table 1). Among the EU Member States, the level of social protection expenditure in relation to GDP was highest in Denmark (33.4 %), France (33.1 %), Sweden (32.1 %), the Netherlands (31.6 %) and Germany (31.4 %), while Austria, Belgium and Finland also reported ratios in excess of 30 %. In contrast, social protection expenditure represented less than 20 % of GDP in Poland, Estonia, Slovakia, Bulgaria, Romania and Latvia (where the lowest share was registered, at 16.8 %).

The use of a purchasing power standard (PPS) facilitates a comparison of social protection expenditure per inhabitant between countries, taking account of differences in price levels (see Figure 1). The highest level of expenditure on social protection per inhabitant in 2009 was registered for Luxembourg (PPS 14 495 per inhabitant), followed some way behind by the Netherlands, Denmark, Austria and Sweden – where social protection per inhabitant was between PPS 9 000 and PPS 10 000. In contrast, expenditure in Romania and Bulgaria was less than PPS 2 000 per inhabitant, while in Latvia it was just above this level. These disparities between countries are partly related to different levels of wealth, but may also reflect differences in social protection systems, demographic trends, unemployment rates and other social, institutional and economic factors.

The highest share of social protection benefits (the largest component of social protection expenditure) was accounted for by old age and by sickness/healthcare benefits; together these two functions accounted for 68.6 % of total EU-27 social benefits in 2009 (see Figure 2). Benefits related to family/children, disability, survivors and unemployment ranged between 6 % and 8 % each, while housing accounted for 2.0 %.

Expenditure on pensions across the EU-27 was equivalent to 13.1 % of GDP in 2009, ranging from a high of 16.0 % in Italy to lows of just over 7 % in Ireland and Cyprus (see Figure 3). Expenditure on care for the elderly in the EU-27 accounted for 0.5 % of GDP in 2009, although Sweden reported a rate that was just over five times as high as the average; expenditure on the elderly fell to 0.1 % of GDP or less in Greece, Estonia, Belgium, Bulgaria, Romania, Cyprus and Germany (see Figure 4).

Average (median) pension levels of 65 to 74 year olds across the EU-27 were generally lower than average earnings for those aged 50 to 59 in 2010 (see Figure 5). This was particularly the case in Cyprus, Greece, Bulgaria and Denmark, where pensions represented between 36 % and 44 % of the average earnings among those aged 50 to 59. This ratio, known as the aggregate replacement ratio, was highest in Luxembourg, France, Romania (2011), Slovakia and Austria, where it was at least 60 %. Relatively low aggregate replacement ratios may reflect low coverage and/or low income replacement from pension schemes within current pension systems, as well as incomplete careers or an under-declaration of earnings.

A breakdown of social protection receipts across the EU-27 in 2009 shows that the majority of receipts could be attributed to general government contributions (39.1 %) and employers’ social contributions (36.7 %), while around one fifth (20.1 %) of social protection receipts in the EU-27 were social contributions paid by protected persons (see Figure 6).

Data sources and availability

Data on social protection expenditure and receipts are drawn up according to the European system of integrated social protection statistics (ESSPROS) methodology; this system has been designed to allow a comparison of social protection flows between EU Member States.

In April 2007, a legal basis was established for the provision of ESSPROS with the delivery of data to start from reference year 2006, as provided by the European Parliament and Council Regulation 458/2007; this was later supplemented by two European Commission implementing Regulations (1322/2007 and 10/2008).

Expenditure on social protection includes: social benefits, administration costs (which represent the costs charged to the scheme for its management and administration) and other expenditure (which consists of miscellaneous expenditure by social protection schemes, principally, payment of property income).

Social protection benefits are direct transfers, in cash or in kind, by social protection schemes to households and individuals to relieve them of the burden of one or more of the defined risks or needs. Social benefits are paid to households by social security funds, other government units, non-profit institutions serving households (NPISHs), employers administering unfunded social insurance schemes, insurance enterprises, or other institutional units administering privately funded social insurance schemes.

Social protection benefits are classified according to eight social protection functions (which represent a set of risks or needs):

sickness/healthcare benefits – including paid sick leave, medical care and the provision of pharmaceutical products;
disability benefits – including disability pensions and the provision of goods and services (other than medical care) to the disabled;
old age benefits – including old age pensions and the provision of goods and services (other than medical care) to the elderly;
survivors’ benefits – including income maintenance and support in connection with the death of a family member, such as a survivors’ pensions;
family/children benefits – including support (except healthcare) in connection with the costs of pregnancy, childbirth, childbearing and caring for other family members;
unemployment benefits – including vocational training financed by public agencies;
housing benefits – including interventions by public authorities to help households meet the cost of housing;
social exclusion benefits not elsewhere classified – including income support, rehabilitation of alcohol and drug abusers and other miscellaneous benefits (except healthcare).

The pensions aggregate comprises part of periodic cash benefits under the disability, old age, survivors and unemployment functions. It is defined as the sum of the following social benefits: disability pensions, early-retirement benefits due to reduced capacity to work, old age pensions, anticipated old age pensions, partial pensions, survivors’ pensions, and early-retirement benefits for labour market reasons.

Expenditure on care for the elderly covers care allowances, accommodation, and assistance in carrying out daily tasks; this expenditure is generally expressed in relation to GDP.

The aggregate replacement ratio measures the difference between gross retirement benefits and gross earnings. It is defined as the median individual gross pension of those aged 65 to 74 relative to median individual gross earnings of those aged 50 to 59, excluding other social benefits; it is expressed in percentage terms.

The schemes responsible for providing social protection are financed in different ways. Social protection receipts comprise social security contributions paid by employers and protected persons, contributions by general government, and other receipts from a variety of sources (for example, interest, dividends, rent and claims against third parties). Social contributions by employers are all costs incurred by employers to secure entitlement to social benefits for their employees, former employees and their dependants; they can be paid by resident or non-resident employers. They include all payments by employers to social protection institutions (actual contributions) and social benefits paid directly by employers to employees (imputed contributions). Social contributions made by protected persons comprise contributions paid by employees, by the self-employed and by pensioners and other persons.

Context

Social protection systems are generally well-developed in the EU: they are designed to protect people (to some degree) against the risks and needs associated with unemployment, parental responsibilities, sickness/healthcare and invalidity, the loss of a spouse or parent, old age, housing and social exclusion (not elsewhere classified).

Pension systems can play a role in allowing beneficiaries to maintain living standards they enjoyed in the later years of their working lives. However, as Europe's population is becoming progressively older, the main challenge social protection systems are going to face is related to their financing, as the proportion of older persons grows while the number of persons of working age decreases.

The main policy framework in this domain concerns the open method of coordination for social protection and social inclusion, which aims to promote social cohesion and equality, through adequate, accessible and financially sustainable social protection systems and social inclusion policies. A Communication from the European Commission titled ‘Working together, working better: A new framework for the open coordination of social protection and inclusion policies in the European Union’ (COM(2005) 706 final) outlines the objectives, which include:

making a decisive impact on the eradication of poverty and social exclusion:
providing adequate and sustainable pensions:
ensuring accessible, high-quality and sustainable health care and long-term care.

The organisation and financing of social protection systems is the responsibility of each of the EU Member States. The model used in each Member State is therefore somewhat different, while the EU plays a coordinating role to ensure that people who move across borders continue to receive adequate protection. The EU seeks to promote actions among the Member States to combat poverty and social exclusion, and to reform social protection systems on the basis of policy exchanges and mutual learning. This policy is known as the social protection and social inclusion process – it underpins the Europe 2020 strategy and will play an important role as the EU seeks to become a smart, sustainable and inclusive economy.

Further Eurostat information

Publications

Main tables

Social protection (t_spr), see:

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 (spr), see:

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)

Dedicated section

Social protection

Methodology/Metadata

Social protection (ESMS metadata file - spr_esms]

Source data for tables and figures (MS Excel)

Social protection statistics: tables and figures

Other information

Regulation 10/2008 of 8 January 2008 implementing Regulation 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
Regulation 458/2007 of 25 April 2007 on the European system of integrated social protection statistics (ESSPROS)
Regulation 1322/2007 of 12 November 2007 implementing Regulation 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

External links

OECD's social and welfare statistics