The Effects of Social Protection Expenditures in Relation to Selected Socio-Economic Indicators in EU Countries

Abstract The extent of social and economic issues has an impact on current society, and ways of solving them reflect not only on social policy but also on results of economic policies. The paper aims to evaluate the effects of social protection expenditures/benefits in relation to selected socio-economic indicators in the EU countries. By use of panel data analysis in the period 2010–2021, the effect of social protection expenditures/benefits (total and by individual function) on GDP per capita, income inequality and on the risk of poverty and social exclusion is examined. The results show a positive effect of social protection expenditures/benefits (total and by selected function-housing, family/children, social exclusion, survivors) on GDP per capita and a negative impact of social protection benefits (total and by functions – social exclusion, family/children, sickness/health care) in the case of the risk of poverty and social exclusion. Conversely, social protection benefits by selected functions have a combined effect on income inequality. The acquired findings demonstrate the significance that is attached to specific areas of social protection policies in the EU countries.