Drivers of the Change in Social Welfare in European Countries

Abstract

Recent discussions about the definition of economic growth in terms of welfare beyond GDP suggest that it is of urgent need to develop new approaches for measuring the economic performance of firms and national economies. For this purpose the DEA methodology is used by simultaneously taking into account economic as well as social and environmental indicators. SBM DEA models with restricted weights are used in order to analyse the impact of different strategies and goals of economic policy for measuring of social welfare. Using Malmquist productivity index the drivers of social welfare change over the period of 2003–2012 for 25 European countries are identified. This approach allows us to decompose the overall change to change in economic, environmental and social component. It can be shown that the main driver of the increasing social welfare in Europe was the environment-saving change of technology.