Social Spending

… a core concept in Socioeconomic and Political Context and Atlas105

Concept description

The Organization for Economic Cooperation and Development (OECD) defines social spending as “the provision by public (and private) institutions of benefits to, and financial contributions targeted at, households and individuals in order to provide support during circumstances which adversely affect their welfare, provided that the provision of the benefits and financial contributions constitutes neither a direct payment for a particular good or service nor an individual contract or transfer.”

In order to measure social spending, the OECD includes “…cash benefits, direct in-kind provision of goods and services, and tax breaks with social purposes. Benefits may be targeted at low-income households, the elderly, disabled, sick, unemployed, or young persons. To be considered “social”, programmes have to involve either redistribution of resources across households or compulsory participation. Social benefits are classified as public when general government (that is central, state, and local governments, including social security funds) controls the relevant financial flows.”

Atlas topic, subject, and course

Income Inequality and Poverty (core topic) in Socioeconomic and Political Context and Atlas105.


OECD (2003), Social Expenditure, Glossary of Statistical Terms, 13 March 2003, at, accessed 13 December 2018.

OECD (2018), OECD Data: Social Spending (Indicator), at, accessed 13 December 2018..

Page created by: Alec Wreford and Ian Clark, last modified on 12 December 2018.

Image: Matthew Klein, Welfare spending across the OECD, Financial Times, 27 November 2014, at, accessed 13 December 2018.