Heterogeneity of government social spending in European Union countries

Abstract

Social expenditure plays an important role in European Union (EU) countries. It improves the lives of citizens whose welfare is endangered due to poverty or illness. However, social expenditure represents a considerable share of the budgets of EU member states. Despite evident similarities in their levels of development, EU countries show apparent differences in social expenditure levels. Therefore, this work aims to determine the similarities and differences between EU countries in this regard. The analysis uses clustering methods, such as hierarchical cluster analysis and the k-means, to divide countries into homogeneous groups. The research demonstrates significant differences between EU countries in the years 2008–2018, which resulted in a low number of objects (countries) in the identified groups. In the case of 6 out of 28 countries, it was not possible to assign them to any group. The research proves that EU countries should take more care when organising their social policy, taking into consideration cultural and social factors.