Is Social Spending Procyclical?

Author/Editor:

Sanjeev Gupta ; Alejandro Hajdenberg ; Javier Arze del Granado

Publication Date:

October 1, 2010

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper studies the cyclical behavior of public spending on health and education in 150 countries during 1987 - 2007. It finds that spending on education and health is procyclical in developing countries and acyclical in developed countries. In addition, education and health expenditures follow an asymmetric pattern in developing countries; they are procyclical during periods of positive output gap and acyclical during periods of negative output gap. Furthermore, the degree of cyclicality is higher the lower the level of economic development.

Series:

Working Paper No. 2010/234

Subject:

Education spending Expenditure Fiscal policy Health care spending Total expenditures

English

Publication Date:

October 1, 2010

ISBN/ISSN:

9781455209347/1018-5941

Stock No:

WPIEA2010234

Pages:

22

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