The OECD Social Expenditure database (SOCX) was created to meet the growing demand for data on social policies. It helps analyse trends in social spending and provides reliable and comparable statistics on public and private social spending, even at detailed program levels. It also looks at how tax systems affect social spending, which varies across countries. SOCX covers all 38 OECD countries as well as selected accession countries, with some data going back to the 1980s. The most recent updates of the SOCX took place in April 2025.
Social spending
Social spending aims to support individuals facing challenging circumstances by redistributing resources across households. It includes providing financial assistance and services to those experiencing poverty, unemployment, or elderly individuals who are not part of the workforce. Additionally, social spending includes funding for healthcare benefits, family assistance programmes, and housing support initiatives.
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Key messages
With the outbreak of the COVID-19 pandemic, the public social spending-to-GDP ratio increased from 20% of GDP in 2019 to 23% in 2020 across the OECD on average. This surge in the spending-to-GDP ratio was largely (over 80%) due to an increase in spending rather than a decline in GDP. After the initial rise with the outbreak of the pandemic, spending-to-GDP ratios declined almost as rapidly as they increased: public social spending fell from 23%, on average across the OECD, in 2020 to 22.1% in 2021 and an estimated 20.5% in 2022.
Private social spending – mainly health insurance and pensions -- was about 3.5% of GDP, on average in the OECD in 2021; it comes in addition to public social spending which amounted to about 22% on average in that year. At around 11-13% of GDP, private social spending was highest in Netherlands, Switzerland and the United States in 2021.
Context
Public social spending
The size of welfare states differs markedly across OECD countries. At just over 30% of GDP in 2024, public social spending was highest in Austria, Finland and France, but a quarter of OECD countries devote around 25% or more. In contrast, public social spending in countries such as Chile, Colombia, Costa Rica, Ireland, Mexico and Türkiye accounts for 15% of GDP or less.
It takes some time for social protection systems to develop into comprehensive welfare states. Across the 17 OECD countries (which were members at the time and for which data is available) public social spending to GDP-ratios more than doubled between 1960 (7.9%) and 2000 (17.9%). This trend also played out in other countries, but at a later stage.
Private social spending
Private social spending refers to the financial resources allocated by non-governmental entities, typically businesses and organisations, to address social needs and provide support or services to individuals or communities. Private social expenditure can be mandatory (e.g. compulsory private health insurance) or voluntary (e.g. pensions benefits based on past voluntary contributions).
In 2021, private social spending amounted to, on average, 3.5% of GDP across the OECD. It was largest in Switzerland (13.2% of GDP in 2021), the United States (12.8%) and the Netherlands (11.4%); whilst it amounted to 4 to 8% of GDP in Australia, Canada, Iceland, and the United Kingdom.
The tax system can have a big impact on social spending
Tax systems can have a big impact on social spending levels as some governments levy direct tax on benefit income or put indirect taxation on income through sales tax. On the other hand, governments can also use the tax system to pursue social policy objectives, such as by offering tax breaks to help low- to moderate earners (e.g. the Earned Income Tax Credit in the United States).
The “net tax effect” of these features can be considerable, particularly in European countries. It amounted to 5% of GDP or more in Luxembourg, Norway, Sweden, Italy, Iceland, Finland, and highest at 7.1% of GDP in 2021 in Denmark. It is smallest in Australia, Türkiye and Korea at below 0.5% of GDP.
Total social spending: The full picture
Considering both public and private social spending and the impact of tax systems on social spending gives a very different picture of countries’ social spending levels than the usual comparison based on gross public spending alone.
For example, the size of private social spending in the Netherlands means that its total social spending as a share of GDP is much higher than gross (before tax) public social spending levels, even though taxation of social benefits is considerable. The United States, with a small “net tax effect” and much larger private social spending (including health and pensions), has the highest level of net total social spending. However, 2021 was an “unusual” year as the COVID-19 Pandemic led to an increase in health and labour market policy related spending.
As a share of GDP, France’s level of net total social spending is relatively close to that of its public social spending, as both private social spending and the net tax effect are moderate compared to other countries.
