WRITTEN QUESTION E-0512/01

by Robert Goebbels (PSE) to the Commission

(22 February 2001)

Subject: Comparability of social statistics between the European Union and the USA

When the Commission publishes studies on the level of the total tax or social security burden in the various Member States and the USA, the comparisons - generally expressed as a percentage of GDP - consistently show the levels to be higher in Europe than in the USA.

However, given the appreciable differences in welfare cover between Europe and the USA, are such comparisons relevant? Apart from the public programmes (such as Medicare and Medicaid), social security in the USA remains largely in the private sphere, or is based on corporate schemes. Millions of Americans of working age have no sickness insurance and do not contribute to a pension fund. Is the Commission able to put an approximate figure to the American social welfare deficit? Would it not help improve the comparability of welfare spending figures on both sides of the Atlantic if non-compulsory, private social expenditure in the USA were taken into account and, in particular, if an assessment were made of the shortfall in social security contributions by the Americans?

Answer given by Mrs Diamantopoulou on behalf of the Commission

(29 May 2001)

The Commission has addressed the issue of net expenditure on social protection in its 1997 and 1999 Reports on Social Protection in Europe on the basis of the study conducted by the Organisation for Economic Cooperation and Development (OECD) to estimate net social expenditure(1). The 1999 Report on Social Protection in Europe states that (page 70) these estimations tend to be country-specific and so there is a question about their comparability across the Union. The estimates published in the report refer to some Member States.

The OECD study contains these estimates for the United States too. The Commission is sending direct to the Honourable Member and to Parliament's Secretariat a table with these data, which show that, using OECD terminology, the overall level of gross public social expenditure is lower in the United States than in the Member States for which data are available, while, on the other hand, net total social expenditure is quite similar in the United States and the Member States. The main difference is that public schemes play a more important role in the Community whilst in the United States private provision

plays an important role. This difference is necessarily reflected in comparisons of the level of taxes and social contributions (paid also on social benefits) to finance mandatory public schemes because these data do not take into account purely private expenditure by households.

On the other hand, the Commission is not in a position to assess the situation in the United States in terms of coverage of population or needs.

Data on social protection expenditure (on the basis of gross or net data) are not sufficient to assess the efficiency of social protection systems because they lack information on the percentage of population covered, on the level of benefits paid to individuals, on the redistributive effects and on the real situation of individuals in terms of their health condition.

(1) See for example Willem Adema, Net Social Expenditure, Labour Market and Social Policy Occasional Papers, No 39, OECD, 1999.