On the Cyclicality of Social Expenditure: New Time-Varying evidence from Developing Economies

Joao Jalles

No 2019/82, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: This paper provides a novel dataset of time-varying measures of social spending cyclicality for an unbalanced panel of 45 developing economies from 1982 to 2012. More specifically, we focus on four categories of government social expenditure: health, social protection, pensions and education. We find that social spending has generally been acyclical over time in developing countries, with the exception of spending on pensions.However, sample averages high marked heterogeneity across countries with the majority showing procyclical behaviour in different social spending categories. In addition,by means of weighted least squares panel regressions with country and time effects, we find that the degree of social spending [pro]cyclicality is generally negatively associated with financial deepening, the level of economic development, trade openness, government size as well as political constraints on the executive.

Keywords: education; health; pensions; time-varying coefficients; weighted least squares; financial development; institutions (search for similar items in EconPapers)
JEL-codes: C22 C23 H50 H60 H62 (search for similar items in EconPapers)
Date: 2019-05
New Economics Papers: this item is included in nep-bec and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp0822019

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