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

  • Received March 30, 2018;
    Accepted August 15, 2018;
    Published September 12, 2018
  • Author(s)
    Mykhaylo Malyovanyi
    ORCID Researcher ID ,
    Nataliia Ivanova
    ORCID Researcher ID ,
    Kateryna Melnyk
    ORCID Researcher ID ,
    Oleksandr Nepochatenko
    ORCID Researcher ID ,
    Oleksandr Rolinskyi
    ORCID Researcher ID
  • DOI
    http://dx.doi.org/10.21511/ppm.16(3).2018.31
  • Article Info
    Volume 16 2018, Issue #3, pp. 389-405
  • TO CITE АНОТАЦІЯ
  • Cited by
    5 articles
  • 1038 Views
  • 132 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

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.

view full abstract hide full abstract
    • Table 1. Analysis of the social protection impact on the factors determining economic growth
    • Table 2. Social policy models
    • Table 3. Results of the OECD countries analytical grouping according to the correlation between the share of private social expenditures in the total costs and GDP per capita (average for the years from 1980 to 2013)
    • Table 4. Pooled Regression for the logarithm of real GDP per capita and the logarithm of socio-economic factors
    • Table 5. Fixed Effect Regression for the logarithm of real GDP per capita and the logarithm of socio-economic factors
    • Table 6. Random Effect Regression with for the logarithm of the real GDP per capita and the logarithm of socio-economic factors
    • Table 7. Assessment of the social expenditure impact (public and private) on the economic growth
    • Table 8. Assessment of the social expenditure impact (public and private) on the economic growth
    • Table 9. Assessment of the social expenditure impact (public and private) on economic growth according to social policy models
Related Articles

  • Impact on poverty and income inequality in Malaysia’s economic growth

    Rabiul IslamORCID Researcher ID, Ahmad Bashawir Abdul Ghani , Irwanshah Zainal Abidin , Jeya Malar Rayaiappan doi: http://dx.doi.org/10.21511/ppm.15(1).2017.05
    Problems and Perspectives in Management Volume 15, 2017         Issue #1         pp. 55-62 Views: 11916 Downloads: 5693 TO CITE АНОТАЦІЯ

    Poverty and income inequality are extreme issues that still exist in Malaysia. Any rise in poverty and income inequality definitely affect economic growth. There are many great efforts taken by the government of Malaysia to eradicate poverty and to reduce the gap of income inequality which occurs since 1970’s. The incidence of poverty and income inequality is higher in rural areas compared to urban areas. This paper is mainly to study the level of poverty and income inequality in Malaysia together with government intervention to develop Malaysia’s economic growth. The research is focused among the working people at Ipoh, Perak. In this paper, questionnaire forms are being distributed to get information regarding the issue of poverty and income inequality. It also looks into the strategies taken by the government of Malaysia to eradicate poverty and income inequality. Few recommendations are given in terms of education policy, financial aid and assistance from government and non-government organization (NGO) to upgrade the standard and quality of living among the poor and lower-income group of people.

  • Impact of inflation on economic growth: evidence from Nigeria

    Anthony Olugbenga AdaramolaORCID , Oluwabunmi Dada doi: http://dx.doi.org/10.21511/imfi.17(2).2020.01
    Investment Management and Financial Innovations Volume 17, 2020         Issue #2         pp. 1-13 Views: 9132 Downloads: 5468 TO CITE АНОТАЦІЯ

    In an attempt to examine the influence of inflation on the growth prospects of the Nigerian economy, the study employs the autoregressive distributed lag on the selected variables, i.e. real gross domestic product (GDP), inflation rate, interest rate, exchange rate, degree of economy`s openness, money supply, and government consumption expenditures for the period 1980–2018. The study findings indicate that inflation and real exchange rate exert a significant negative impact on economic growth, while interest rate and money supply indicate a positive and significant impact on economic growth. Other variables in the model depict no influence on the economic growth of Nigeria. The causality result shows the unidirectional relationships between interest rate, exchange rate, government consumption expenditures and gross domestic product. However, inflation and the degree of openness show no causal relationship with gross domestic product. As a result, the study recommends that a more pragmatic effort is needed by the monetary authorities to target the inflation vigorously to prevent its adverse effect by ensuring a tolerable rate that would stimulate the economic growth of Nigeria.

  • Formalization of the impact of imbalances in the movement of financial resources on economic growth of countries in Central and Eastern Europe

    Serhiy KozmenkoORCID , Maxim KorneyevORCID Researcher ID doi: http://dx.doi.org/10.21511/afc.01(1).2017.06
    Accounting and Financial Control Volume 1, 2017         Issue #1         pp. 48-58 Views: 7875 Downloads: 1375 TO CITE

    The article deals with the impact of financialization on economic growth in countries of Central and Eastern Europe. It determinesthe impact of imbalances in the movement of financial resources caused by financialization on economic growth of these countries. It proves that the implementation of measures aimed at increasing the openness of the economy and maintaining solvent demand have a positive impact on economic growth of the surveyed countries in the long run. It also proves the importance of developing a set of measures of strategic nature regulating imbalances in the movement of financial resources caused by financialization.

Download Preview
Close
Problems and Perspectives in Management
Problems and Perspectives in Management