Government expenditure on social protection in EU

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The FINANCIAL — General government total expenditure on social protection (as defined by COFOG) in the European Union (EU) amounted to €2,890 billion in 2017. This was equivalent to 18.8 % of GDP or 41.1 % of general government expenditure.

Expenditure on ‘social protection’ remained by far the most important COFOG division in 2017 in the European Union and in all reporting Member States and EFTA countries. This reflects government’s core function to redistribute income and wealth, financed by compulsory payments.

The ratio of government social protection expenditure to GDP varied across EU Member States from less than 10 % in Ireland (9.5 %) to nearly a quarter in Finland (24.9 %). Six Member States – Finland, France, Denmark, Italy, Austria and Sweden – devoted at least 20 % of GDP to social protection, while Ireland, Lithuania, Malta, Latvia, Romania, Czechia and Bulgaria each spent less than 13 % of GDP on social protection.

Bar chart of general government expenditure on social protection as a percentage of GDP, 2017

Social protection expenditure can be further broken down into a number of detailed groups. The group ‘old age’, which includes pensions, accounted for 10.1 % of GDP in the EU in 2017. It made up the largest part of social protection expenditure in all Member States, with the highest shares being registered in Greece and Finland (both 13.8 %), followed by France and Italy (both 13.4 %) as well as Austria (12.5 %). In contrast, Ireland (3.4 %), Lithuania (5.7 %) and Cyprus (6.0 %) recorded the lowest shares.

Infographic of government expenditure by different functions

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‘Social protection’ and ‘health’ are the only two functions whose shares in total government expenditure increased during the period from 2007 to 2017. In the EU, social protection expenditure increased its share of total expenditure from 38.2 % to 41.1 %.

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