Growth and the Welfare State in the EU: A Causality Analysis

In this paper, we test for causality between GDP growth and social protection expenditure in the European Union. To that end, we apply Hsiao's (1981) sequential procedure to data for twelve EU countries along the 1970-1994 period. Our results suggest that, for Belgium, Germany, Ireland, Luxembo...

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Bibliographic Details
Published in:	Public choice Vol. 109; no. 1/2; pp. 55 - 68
Main Authors:	Herce, José A., Sosvilla-Rivero, Simón, De Lucio, Juan José
Format:	Journal Article
Language:	English
Published:	Dordrecht Kluwer Academic Publishers 01-10-2001 Springer Nature B.V
Subjects:	Causality Cell growth Critical values Econometrics Economic Development Economic growth Economic models Economics Empirical evidence European Union Expenditures GDP Government Spending Gross Domestic Product Gross National Product Null hypothesis Public choice Social protection Social Welfare Statistical forecasts Time dependence Variables Welfare Welfare State Europe
Online Access:	Get full text
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Summary:	In this paper, we test for causality between GDP growth and social protection expenditure in the European Union. To that end, we apply Hsiao's (1981) sequential procedure to data for twelve EU countries along the 1970-1994 period. Our results suggest that, for Belgium, Germany, Ireland, Luxembourg, the Netherlands, Portugal, and Spain, causality runs only from social protection growth to GDP growth, while for Denmark, France, Greece, Italy, and the United Kingdom, no causality is found between social protection growth and GDP growth.
Bibliography:	ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23 ObjectType-Article-1 ObjectType-Feature-2
ISSN:	0048-5829 1573-7101
DOI:	10.1023/A:1012090816420