Abstract
This paper examines the impact of inflation on social expenditures in welfare states. The impacts of inflation on public finances and other measurables, such as welfare, have been studied in numerous papers.
The same goes for the link between public spending and inflation. However, there seems to be a lack of research on the effect of inflation on social expenditures.
In this paper, we want to find if there is a general trend in social expenditures in welfare states when facing inflation and to analyse whether this reaction changes based on the type of welfare state in question. To answer these questions, we looked at inflation and social expenditure data in 37 OECD countries between 1980 and 2018.
We then tried to assess whether governments react differently in adjusting social expenditures when facing inflation. The data used in this study comes from the OECD.