Importance of Government Social Expenditures for Income Inequality in EU Countries
Importance of Government Social Expenditures for Income Inequality in EU Countries

Summary/Abstract: The issue of growing income inequality has become a central focus in global economic policy debate. This paper examines the impact of government social spending on income inequality in the 27 member states of the European Union between 2010 and 2020, utilizing regression analysis of panel data. The findings indicate that the level of government social spending reflects the varying fiscal policies on social protection across EU countries, with the largest share allocated to old age expenditures. However, the analysis reveals that old-age government expenditures do not have a statistically significant impact on income inequality. In contrast, increased spending on unemployment benefits and support for families and children is associated with a reduction in income inequality. These results underscore the need to address structural disparities and provide targeted unemployment and family support to ensure adequate living conditions for vulnerable groups.

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