OECD: France remains world champion for social welfare spending

Anca Alexe 24/01/2019 | 08:26

A study by the Organisation for Economic Cooperation and Development (OECD) shows that France’s social spending is the highest in the developed world relative to the size of its economy, with expenditure on healthcare, pensions and other social services at 32 percent of GDP last year.

France’s current social spending level has seen a sharp rise since 1990, when it was just below 25 percent of GDP. In 1960, the level was around 12 percent of GDP.

This follows the trend also seen in other developed countries, reflecting the development of more comprehensive welfare and higher pension spending as more people are living longer.

The average social spending of the 36 OECD member countries is 20.5 percent of GDP, most of which is spent for pensions. France is followed by Finland, Belgium, Denmark, Italy, Sweden and Greece. At the other end of the spectrum, Mexico spends only 7.5 percent of GDP. Low-spending OECD members are also South Korea, Chile, Turkey, Iceland or Israel.

However, when taking into account both public and private spending, France continues to lead but is followed by the US with total social spending at 30 percent of national income, compared to its 19 percent when looking at public spending alone.

Despite topping the list for social spending, France has seen violent protests by “yellow vests” over the past two months, as many low-income workers feel that their living standards have deteriorated. The movement began when the government announced a tax hike for fuel, but has also come to highlight cuts to public services in some areas and complaints that the rich are not paying their fair share in taxes.

The protests have led president Emmanuel Macron to announce a EUR 10 billion package to increase wages and provide tax relief for some low-income citizens. However, protests are still being carried out.

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