Slight Decline of the Social Expenditure/GDP Ratio. Austria's Social Expenditure in 1996
Computed in accordance with the European System of Integrated Social Protection Statistics (ESSPROS), social expenditure in Austria totaled ATS 714 billion or 29.5 percent of GDP in 1996, a decline of 0.2 percent against 1994 and 1995 achieved in spite of weak economic growth. Social spending slightly exceeded the EU average of 28.4 percent of GDP (1995), but matched that of other countries of comparable social and economic structures. In the early 1990s, the introduction of substantial new benefits caused a steep rise in the social expenditure/GDP ratio, but measures taken to consolidate public budgets have dampened the pace of the increase since the mid 1990s.
After shooting up in the early 1990s, due to additional benefits such as the second year of parental leave, tax credits for children and the long-term care benefit, and leveling off at 29.7 percent in 1994 and 1995, the social expenditure/GDP ratio began to shrink at last, to 29.5 percent, in 1996, thanks to the effect of the first austerity package and in the face of a weakening economy and growing unemployment. As defined by the European System of Integrated Social Protection Statistics (ESSPROS), social outlays in Austria totaled ATS 714 billion in 1996, equivalent to 29.5 percent of its gross domestic product, and down from 29.7 percent in 1994 and 1995 in spite of the slump and high unemployment rates. During the 1980s, changes in the social expenditure/GDP ratio reflected mainly cyclical variations: it rose throughout the period of sluggish growth until 1987, but fell back below the 1980 level when the economy recovered. Structural grounds, i.e., the introduction and improvement of benefit levels, such as the second year of parental leave, improved eligibility criteria for women's pensions, tax credits for children and the long-term care benefit, caused the social expenditure/GDP ratio to shoot up again in 1991 to 1994. In spite of the subsequent cyclical downswing, the ratio leveled off in 1995 and actually declined in 1996 as a consequence of the first austerity package. In view of the economic upswing and ongoing efforts at further consolidation, the trend is likely to continue in 1997 and 1998. In 1991 to 1996, social spending grew by altogether 36.5 percent. Above-average growth rates were registered for unemployment benefits (+61.5 percent), invalidity benefits (+55.5 percent) and family benefits (+43.4 percent). The scope of social expenditures in Austria is similar to that of other European countries of comparable economic and social structures. As a proportion of GDP, Austria's 1995 ratio was slightly above the EU average of 28.4 percent which was depressed by the meager level of social spending in the southern European countries. The structural composition of social outlays in Austria differs markedly from the EU average insofar as old age pensions claim a much larger share (Austria 48 percent, EU 44 percent) whereas the share of spending on unemployment (6 percent and 8 percent, respectively) and on health care and invalidity (33 percent versus 36 percent) are distinctly lower in Austria.
Leichter Rückgang der Sozialquote. Österreichs Sozialausgaben 1996; Slight Decline of the Social Expenditure/GDP Ratio. Austria's Social Expenditure in 1996
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