Social protection spending: children vs pensioners
Social policies tend to favour one generation over the other but spending must be distributed more equally across age groups.
A growing body of evidence suggests that changes in social spending have tended to favour pensioners at the expense of families and children in the aftermath of the global economic crisis. Policymakers need to be mindful of the different impacts of benefit reforms on pensioners and working-age families with children. This is particularly important when the rates of poverty in childhood often exceed those in old age. Instead of prioritising one group at the expense of another, social policies need to provide adequate protection for all.
Falling family benefits, rising old age benefits
Spending on family benefits has fallen by at least one percentage point as a share of total social protection expenditure between 2008 and 2016 in 10 out of 31 European Economic Area countries (plus Switzerland) for which comparable data are available from Eurostat. The share of family benefit spending increased in only three countries: Bulgaria, Italy and Poland. Not a single country increased its share of family benefit expenditure by more than one point during the “austerity” period of 2010-2013, while 10 countries decreased it.
Meanwhile, the share of spending on old-age benefits increased in 23 countries and decreased in only three: Germany, Poland and Switzerland. In 2016, the share of old-age spending ranged from 28% in Iceland to 64% in Greece, while the share of family spending varied between 4% in the Netherlands and 15% in Luxembourg. In countries such as Portugal, Greece and the Netherlands, the share of old-age spending was at least 10 times greater than the share of family benefit spending.
The countries that devoted a greater share of their social protection spending to old-age benefits between 2008 and 2016 were often the same countries that decreased the share of family benefit spending. There is a negative correlation between the change in the share of old-age versus family benefit spending. This is not necessarily surprising: when more resources are used for one type of spending, there may be less left for another. Indeed, per capita spending on family benefits shrank in real terms since 2008 in 15 countries, while expenditure on old-age benefits increased in each of the 31 countries. The largest falls (or smallest increases) in family benefit spending occurred between 2010 and 2013, and many countries engaged in some form of fiscal consolidation following the global economic crisis.
The impact on child well-being
|“Ensuring intergenerational fairness requires competing interests to be balanced; difficult trade-offs need to be made” (ICAEW Intergenerational Fairness Survey 2017)|
Yekaterina Chzhen is a Social and Economic Policy Specialist at the UNICEF Office of Research – Innocenti. This article updates the analysis in Children of Austerity (Oxford University Press 2018). The opinions expressed here are those of the author and do not necessarily reflect the policies or views of UNICEF, nor of any particular Division or Office. Twitter @kat_chzhen
The Office of Research – Innocenti is UNICEF’s dedicated research centre. It undertakes research on emerging or current issues in order to inform the strategic directions, policies and programmes of UNICEF and its partners, shape global debates on child rights and development, and inform the global research and policy agenda for all children, and particularly for the most vulnerable.