Public funding of social protection: Impact on social indicators in Eurozone countries

Igor Chugunov,Olha Nasibova

doi:10.21511/imfi.18(2).2021.15

Abstract

Social protection has long been a relevant subject of scientific debate. Its development is interrelated with the study of fiscal factors (collection of social contributions), establishment of major social protection vectors, and confirmation of hypotheses about the link between social protection policy and the resulting socio-economic indicators.The purpose of the paper is to study the impact of public funding of social protectionon social indicatorsusing the example of Eurozone countries. To this end, a number of economic and mathematical methods of analysis were applied to process panel data of seventeen countries for the last fifteen years, including the calculation of the relative rate of variation, regression dependence statistics, and cluster analysis.The study established the irrelevance between the scope of the fundingof spending on social protection and social contributions (coefficient of determination R2=0.255). As illustrated, social indicators are determined not only by the amount of funding of social spending, but also by the structure of the social protection system, in particular, the focus on assistance to families with children and disability compensation (coefficient of determination R2&amp;gt;0.3). The general level of public funding for social spending items results in the 69% income inequality index andis behind 58% of non-economic parameters affecting life quality. The information outlined in the papercan serve as a basis for the formation of social and budgetary policy, as well as the revision of the structure and scope of social protection funding toensure an efficient impact on the quality of life of the population.

Highlights

Sustainable development is considereda crucial goalaround the world and includeseconomic, social and environmental aspects
This study is devoted to the idea of developing a system of public funding for social protection, which could improve the quality of life in the country
In contrast to the prevailing view that increasing fiscal capacity, increasing contribution rates and applying a progressive system of their accrual are advisable strategies, it was argued that the best option for achieving social welfare is to promote income transparency, ensure responsible attitude to the payment of the respective social contributions, and establish optimal social standards in the face of improving macroeconomic conditions

Summary

INTRODUCTION

Sustainable development is considereda crucial goalaround the world and includeseconomic, social and environmental aspects. The focus of In view of the above, determining the impact of international organizations on social needs is at- social security contributions on public social bentributedto the fact that their provision has a posi- efits with regard to the factors of inequality (the tive effect on the economic situation and assists in Gini coefficient) and social progress index reovercoming barriers to economic growth. The re- tory payments to public funds and entitlement to sults of the analysis of this relationship make it future social benefits (Organisation for Economic possible to substantiate the fiscal policy with re- Cooperation and Development, 2021a)), and social gard to the social contributions of a particular spending Sickness, old-age pensions, disability, and family benefits

Research data

Findings

DISCUSSION

CONCLUSION