Over the past two decades, EU spending on social assistance programs has increased by billions of euros.
(CN) – The richest 5% of people in the European Union earned nearly five times more than the poorest 5%, but its statistics agency found that social transfers, including social assistance and childcare allowances disease, have reduced income inequality by nearly 60%. Analyzes of health care and family allowances released by Eurostat on Monday reveal parallels between a strong social safety net and lower income inequality.
Similar to the US concept of welfare, Eurostat defines the benefits of social protection as “transfers, in cash or in kind, made to relieve families and individuals of the burden of one or more social risks or needs”.
Using a standardized currency, the average person in the EU has 17,871 units of disposable income, ranging from 7,724 in Romania to 28,675 in Luxembourg. Luxembourg is also among the highest in the EU for healthcare spending and other benefits.
In 2019, the EU spent 1.1 trillion euros (1.14 trillion dollars) on healthcare services, nearly 8% of GDP and 30% of total social safety net spending. Over 40% of benefits went to inpatient healthcare, while 30% went to outpatient care and 14% to paid sick leave.
With nearly 4,000 euros ($ 4,100) per person, Germany spent the most on healthcare per person, followed by Luxembourg and the Netherlands. With 10% and 9%, Germany and the Netherlands also spent the highest share of GDP on healthcare services.
At the low end, Bulgaria, Latvia and Greece each spent less than 1,000 euros ($ 1,025) per person.
Bulgaria, Romania and Lithuania reported the highest income gap among EU member states. Greece and Latvia rank in the second highest category.
According to the National Health Expenditure Accounts, about 20% of U.S. healthcare costs ($ 830 billion, or 850 billion euros), were covered by federal Medicare and 16% ($ 671 billion, or 655 billion euros) from Medicaid for low-income families.
Other social benefit expenditures across the EU include tailored programs for old age and survivors, disability, unemployment, housing and social exclusion, as well as families and children.
EU spending on social protection programs covering benefits for families and children exceeded € 315 billion ($ 323 billion) in 2019, about 2.3% of the region’s GDP. While representing 8.4% of social benefit expenditure, child and family protection increased from 27% to 39% in the two decades following 2000, as the number of children in the EU fell by 8. %.
By comparison, the United States spends 7% of its federal budget ($ 482 billion, or € 470 billion) on children. According to the National Bureau of Economic Research, in 2016 the United States spent $ 200 billion on programs that provide aid to low-income families with children.
The increase in EU benefits is followed by the increase in spending on benefits, maintenance of birth income and childcare.
“The rise in childcare spending is perhaps not surprising, given that EU employment policy has strongly encouraged the importance of affordable childcare services in enabling parents to work (if they wish) while raising a family, “explains the report.
Using a purchasing power standard that takes into account the varying cost of living across Member States, the average EU county spent 3,875 units per child. Luxembourg spent the most per child, 12,237 standard purchasing power units and allocated the highest part of the social benefit budget, 15% to families and children.
In the rest of the member states, spending per child ranged from 7,891 in Germany to 481 in Cyprus.
At the top of the rankings, Luxembourg, along with Germany and Denmark, each spent 3% of GDP on child-family benefits in 2019. At 0.8%, Malta spent the least on child-family benefits, followed by Cyprus , 1%, and Italy, 1.1%.
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