Government Social Spending and GDP: has there been a change in social policy?

Abstract

Government Social Spending (GSS) is made up of a very heterogeneous range of variables, monetary transfers for retirement or illness, unemployment benefits, family services, active labour market policies and health expenditure. We believe that each of these components is of enormous importance to the economic development of a country. As has often been affirmed, however, GSS is one of the economic aggregates most sensitive to the ups and downs of economic growth. In moments of crisis, sharp cuts are almost immediate, and these may or may not be recovered when times are good. In this article, we examine the sensitivity of GSS to the evolution of Gross Domestic Product (GDP) in order to reveal the relationship between the two.