The Impact of the Great Recession on Social Spending in Romania

The paper attempts to do a comprehensive analysis on how spending patterns were affected by the most severe economic crisis since the oil shocks in the 70's. We have attempted to see which services have been significantly affected by the crisis, and whether social spending has risen and managed to counter the effects of the crisis. We have found that, despite generalized increase in social spending, the crisis had no major impact for some important social spending categories. Social protection revenue has increased and matched to a good extent social protection spending, which was also affected by a strong increase in the cohorts reaching retirement age. We also found that, contrary to other literature findings, spending on social services was countercyclical, increasing in the first years of the crisis, and declined afterwards. There is evidence that social spending managed to sustain a decrease in poverty and inequality during the crisis.