Abstract:

Economic crises experienced by countries bring the role of the state in the economy to the agenda. Crises affect the economy in many dimensions. However, unemployment, income distribution disorder, and a decline in growth rates draw attention as the main indicators. Social transfer expenditures, which are fiscal policy instruments, are used to prevent these economic and social problems. Social transfer expenditure consists of in-kind and cash payments made by the state to low-income and vulnerable households. The aim of this study is to provide an effective economic policy proposal through the determinants of social transfer expenditure policies. The study uses panel data econometrics as a method. The study covers the period between 2007-2017. Organisation for Economic Co-operation and Development (OECD) member countries are included in the analysis. The share of social transfer expenditures in GDP, population, unemployment, growth, dependency ratio, and education level are taken as variables. The important feature of the study is to examine the effect of macro variables on social transfer expenditures, which is a gap in the literature. As a result of the study, while the increase in the level of education and economic growth have a decreasing effect on social transfer expenditures, the increase in the dependency ratio and unemployment have an increasing effect on social transfer expenditures.

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