International results of the TSSA

The divide between east and west

In Europe, the governments and social insurances of each country protect the population by offering various social benefits. Countries' expenditure on these benefits vary according to their economic situation, the population’s health status and their demographic structure, among others. The countries with the highest social expenditure are found mainly in Northern and Western Europe. It is lower in the Eastern European countries.

 

In 2018, Switzerland's expenditure on social benefits amounted to CHF 20 795 per inhabitant and is among the highest in international comparison. This amount corresponds to 24.6 % of the gross domestic product (GDP), which places Switzerland in the middle of the scale.

 

Strongest social security system in the wealthy countries

As can be seen from the graph below, spending on social benefits is generally higher in countries with a high GDP (e.g. Denmark) than it is in countries with a lower GDP (e.g. North Macedonia). Switzerland is the third most prosperous country on the European continent (GDP per inhabitant: CHF 85 000). Its social expenditure as a percentage of the GDP (24.6) is in an intermediate position close to the European Union average (EU-28: 26.5%).

Per inhabitant social expenditure is increasing almost everywhere

An increase in social expenditure can also be observed in most European countries (see graph below). In Switzerland, social expenditure per inhabitant (and at constant prices) increased by +1.6% between 2009 and 2018.

Social expenditure in Greece decreased sharply between 2010 and 2014 (-20%) and this was in a context of an austerity budget which particularly affected health care and disability benefits. Since then, social expenditure has remained stable.

Economic developments and social expenditure

Of the 23 countries with complete time series, 16 saw their social expenditure increase faster than their economic activity (GDP) between 1995 and 2018. For example, in Switzerland, social benefits as a percentage of the GDP increased by 4.8 points. Greece and Iceland among others saw a faster increase in social expenditure (6.5 and 5.6 percentage points of the GDP).

The remaining 7 countries registered negative growth of social expenditure expressed as a percentage of gross domestic product (GDP). Sweden and Ireland saw a decline of 3.8 points.

For most Eastern European countries, data are available from 2000 onwards. Between 2000 and 2018, social benefits as a percentage of the GDP in these countries remained stable at around 18% on average and against the context of an economic catch-up.

Benefits paid mainly for old age and sickness

The many social benefits provided in Switzerland and other European countries can be classified by the type of risk or need that they cover (social security by function).

In financial terms, old age represents the first area of intervention of the social security system. This is true in Switzerland (10.6% of the GDP) as in most other European countries (EU-28 average, 10.8% of the GDP). In general, the higher the share of the older population, the higher this expenditure.

Social expenditure on health is in second place. In Switzerland, benefits paid in this area amount to 7.8% of GDP, in Germany 10.1%, in France 9.0% and in Italy 6.4%.

Next in importance are expenditure for families/children, the disabled and survivors (in the EU-28: 2.2%, 2.0% and 1.4% of the GDP, respectively). In Switzerland, disability benefits (2.1% of GDP) are higher than those for families/children (1.5% of the GDP).

Both in Switzerland and in the European Union, unemployment, social exclusion and housing absorb percentages of the GDP which are close to or below 1%. The good economic situation in 2018 has contributed to the low level of unemployment benefits in Europe.

 

Taxes and social contributions finance social security

Social security expenditure is funded by different sources (“receipts”). The most important are social contributions and government funding.

In Switzerland, social contributions from employers and protected persons account for 67% of receipts. The share borne by protected persons, in particular employees, is 37% and that of employers 30%. By way of comparison, in the EU, these two types of social contributions amount to 20% and 35% respectively.

The second most important financial source is public contributions. In Switzerland, these account for 23% of the total receipts. This share is relatively low in international comparison: public contributions are less important only in four countries (e.g. in Poland with 18%).

In Switzerland, property income is a not insignificant source of financing. This accounts for 10% of social security receipts. These are mainly generated on the financial and real estate markets, particularly by pension funds. In three European countries in particular, the share of property income is higher than in Switzerland: e.g. in the Netherlands, 15%.

Further information

Graphs

Other statistics on financial flows of social protection

Statistical sources and concepts

Contact

Federal Statistical Office Section Social Welfare
Espace de l'Europe 10
CH-2010 Neuchâtel
Switzerland

info.social@bfs.admin.ch

Tel.
+41 58 461 44 44

This page presents the results for 2018; the results for the year 2020 as well as the revised time series are available on the new page "Results during COVID-19".

Remark

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