Social Spending: We’re Number 16 (Public Social Spending) and 2 (Total Net Spending)

How does the United States compare with other OECD countries in terms of social spending? There are two terms involved here: “Public Social Spending” means social spending with financial flows controlled by general government (different levels of government and social security funds), such as social insurance and social assistance payments. “Total Net Social Spending” takes into account public and private social expenditures, and also include the effect of direct taxes (income tax and social security contributions), indirect taxation of consumption on cash benefits as well as tax breaks for social purposes.

In comparison with other OECD countries, the United States is tucked into the middle, ranking 16th in public social spending as a percentage of GDP. But when looking at total net social spending, which includes private social expenditures and indirect taxes and tax breaks, the US ranks as 2nd among OECD countries. The average public social spending for OECD countries is 21.1 percent of GDP, while the average total net social spending is 20.9 percent of GDP.

Source: A complete list of data sets on US public social spending is available at www.oecd.org/social/expenditure.htm.