PUBLIC EXPENDITURE IN THE LIGHT OF THE GRADUAL CHANGES IN THE EUROPEAN LABOUR MARKET

During the second half of the 20th century significant changes in the structure and concept of the welfare state in Europe have emerged, mainly due to the changes in labour market. Since the 70s last century European labour market has passed gradual changes. Progressive implementation of labour-saving technologies, information and communication technologies changed economic activity and consequently the character and forms of work. The accompanying phenomenon of these changes in the labour market was growing uncertainty and the level of unemployment. People threatened by the unemployment, especially by the long term unemployment became dependant on social benefits. Multiple increase in public expenditure in the social sector emerged and welfare state has found itself in a crisis especially since the 90s of the last century when long term unemployment has risen significantly. Given the fiscal unsustainability of the current social systems, measures and reforms addressing the fiscal crisis of the welfare state are being introduced. The aim of this paper is to assess the dynamics of current social expenditure of the EU member countries in the light of the current changes in the labour market and identify the fiscal trend.