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Is Social Spending Procyclical?
Author:
Mr. Sanjeev Gupta
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,
Alejandro Hajdenberg
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, and
Mr. Javier Arze del Granado
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Series:
IMF Working Papers
Volume/Issue:
Volume 2010: Issue 234
Language:
English
Publication Date:
01 Oct 2010
DOI:
https://doi.org/10.5089/9781455209347.001
ISBN:
9781455209347
ISSN:
1018-5941
Pages:
22
Keywords:
WP; developing country; expenditure share; output gap
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2010: Issue 234