PUBLIC SOCIAL EXPENDITURE in 2015, Public Social Expenditure-To-GDP Ratios with Lower Absolute Poverty Rates (Figure 5.12)

5. EQUITY

PUBLIC SOCIAL EXPENDITURE In 2015, public social expenditure-to-GDP ratios with lower absolute poverty rates (Figure 5.12). This varied considerably across the Asia/Pacific region, but suggests that public social spending helps to alleviate were generally well below the OECD average disadvantage and enhances equity. (Figure 5.10). Average social protection spending in the Asia/Pacific region was about one-third of the average in the OECD as a whole. Public social spending in Japan, New Zealand and Australia is close to 20% of GDP, and Data and measurement around 10% of GDP in Korea, and Mongolia. By contrast, Public social expenditure concerns the public spending on social protection is around 2% of provision of cash, in-kind and fiscal support to GDP in Bangladesh, Cambodia, Lao PDR and Myanmar. households and individuals. To be included in The distribution of social spending also varies social spending, programmes have to involve across countries (Figure 5.11). On average, public compulsion in participation or interpersonal spending on social insurance accounts for almost half redistribution of resources, and address one or of social spending; health expenditure account for more contingencies, such as low income, old age, more than one third; and, social assistance for about unemployment or disability. Social spending is one fifth. However, there are large variations across public when general government controls the countries: many Asia/Pacific economies have relatively relevant financial flows. young populations compared to OECD countries (see Data on social protection for OECD countries Figure 3.5), which helps to explain relatively small were taken from the OECD Social Expenditure spending pension insurance benefits (Pensions: Database (SOCX). Public social spending for Asia/ coverage and replacement rates). Pacific countries as in Figure 5.8, from the Asian In many Asia/Pacific countries, social insurance Development Bank’s Social Protection Indicator, as supports cover the relatively small public and formal cleaned for partial health data, and include sectors, and does not cover the large group of informal general government expenditure on health as workers and/or self-employed workers and the elderly taken from the WHO (World Health Organisation) population who had little opportunity to contribute to Global Health Expenditure Database. Data for pension schemes in the past. In all, social insurance OECD countries are taken from the OECD Social benefits in many Asia/Pacific countries do not benefit Expenditure Database (SOCX). For Kazakhstan, the poor. Social insurance (which includes pensions) Hong Kong, China and India data were taken from accounts for about 65% of reported social protection the ILO World Social Protection Report 2017-2019. expenditure in Azerbaijan and Malaysia whereas it is Public spending on education is not regarded as less than 5% in Myanmar and Timor-Leste. Social within the social domain, and spending data are Assistance (including assistance for elderly, child generally not included here. Measurement issues welfare, disability, welfare assistance) usually accounts affect the recording of data on public social for a relatively small share of reported social protection protection expenditure, in particular regional/ expenditure. Health accounts for more than two third local social spending programmes are not always of social expenditure in Myanmar, Bhutan, Cambodia, reflected in the available statistics for a country, Papua New Guinea and Lao PDR whereas in Armenia e.g. as for India, and the data here may therefore and Azerbaijan only one fifth is dedicated to health underestimate public social effort. Social related risks. Active labour market programmes play a expenditure data coverage may differ between relatively small role, except in Bangladesh where ADB,ILOandOECD,intermofcountriesand ALMPs account for around 15% of reported social broad policy area, and therefore reported protection expenditure (Figure 5.11). aggregate (regional) indicators of social spending Considering absolute poverty rates in low- and by the different organisations are not the same. middle-income countries it appears that countries For data on poverty see indicator Poverty. with higher public social expenditure tend to be those

86 SOCIETY AT A GLANCE: ASIA/PACIFIC 2019 © OECD 2019 5. EQUITY

Figure 5.10. Public social expenditure across the Asia/Pacific region are generally well below the OECD average Public social protection expenditure as a % GDP, 2015/17 or latest year available

Source: OECD estimates based on ADB (2019), “The Social Protection Indicator: Results for Asia in 2015 (http://spi.adb.org/spidmz/index.jsp – http://spi.adb.org/); WHO (World Health Organisation) Global Health Expenditure Database, http://apps.who.int/nha/database/ViewData/ Indicators/en; ILO World Social Protection Report 2017-19, www.social-protection.org/gimi/gess/ShowTheme.action?th.themeId=3985; OECD Social Expenditure Database (SOCX), (www.oecd.org/social/expenditure.htm); and, World Bank, World Development Indicators, http:// data.worldbank.org/indicator. 1 2 http://dx.doi.org/10.1787/888933900439

Figure 5.11. Social spending distribution Figure 5.12. Public social spending varies across countries and poverty Public social protection expenditure by broad programme area, % GDP Share of population living with less tha USD 1.9 per day, 2017 or latest

Labour market programmes Health 40 Social assistance Social insurance PNG 15 TLS 30

LAO 10 IND 20 BGD

5 10 MMR IDN PAK R² = 0.1173 BTN ARM KGZ FJI CHN MNG 0 0 MYS 0 5 10 15 Public social protection expenditure as a % of GDP, around 2015

Source: See Figure 5.10. Source: See Figure 5.10. 1 2 http://dx.doi.org/10.1787/888933900458 1 2 http://dx.doi.org/10.1787/888933900477

SOCIETY AT A GLANCE: ASIA/PACIFIC 2019 © OECD 2019 87 From: Society at a Glance: Asia/Pacific 2019

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Please cite this chapter as:

OECD (2019), “Public social expenditure”, in Society at a Glance: Asia/Pacific 2019, OECD Publishing, Paris.

DOI: https://doi.org/10.1787/470d6300-en

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