The recent economic crisis has provided a stress test for the vulnerability of social institutions.
This paper assesses the vulnerability of social institutions in light of the current crisis, and surveys past
episodes, when social institutions faced similar challenges. Public pay-as-you-go pension systems have
generally weathered the crisis well, but private pension funds were severely affected by the financial crisis.
While health care spending drifted up further in the early part of the crisis, it levelled off in 2010 and 2011,
on average in the OECD, for an unprecedented two years with no spending growth. But, in countries hard
hit by the crisis public outlays on health care declined considerably. Unemployment insurance expenditure
increased during the crisis in most OECD countries. In some countries, spending rose considerably more
than the number of unemployed, reflecting an extension or more generous benefits, while in others the
increase was considerably smaller, pointing to adequacy problems of those unemployment insurance
schemes. Five country case studies focusing on how social institutions absorbed shocks in the more distant
past are also examined and lessons are drawn from these experiences.
Vulnerability of Social Institutions
Lessons from the Recent Crisis and Historical Episodes
Working paper
OECD Economics Department Working Papers
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Abstract
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