Country debt vs. Social expenditures

Inspired by a question retweeted by Mark Thoma, I use ECB data to compare Government debt vs. Social Expenditures from 1995 to 2012, for 26 countries of EU-27 (Malta excluded due to lack of data).

 

First, average debt vs. average social expenditures yields

 

 

which would suggest a positive but no statistically significant (R2=0.3) relationship between debt and social expenditures.

 

Second, if we compare now average social expenditures and growth in national debt since 2007 we would have

 

 

which now would suggest a negative relationship (those countries with the lowest social expenditures would have seen their national debts grow faster) but again the relationship would not be statistically significant.

 

Finally, I remove the outliers in both analyses (high debt countries Belgium Italy and Greece in the first analysis, highest increase in debt by Ireland and Latvia in the second) to get

 

 

and

 

 

which in both cases would suggest an even lower statistical significance.

Deixa unha resposta

O teu enderezo electrónico non se publicará Os campos obrigatorios están marcados con *