Social Benefit based on the ILO (International Labour Organization) standards and Social Expenditure based on the OECD (Organisation for Economic Co-operation and Development) standards are both financial statistics developed by international organisations. In this statistical report, the two statistics are collectively referred to as the Financial Statistics of Social Security. In the following sections, we first explain Social Benefit based on the ILO standards, and then, Social Expenditure based on the OECD standards.
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Cost of Social Security based on the ILO standards
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Since 1949, the ILO conducted 18 international inquiries on Social Benefit and published the results. In these inquiries, data on receipts and expenditure were collected within the framework of the ILO Convention No. 102 (1952) concerning Minimum Standards of Social Security and ILO Recommendations No. 67 and No. 69 (1944). Japan had been cooperating with the ILO inquiries since it joined the United Nations in 1957; the relevant government agency (initially the former Ministry of Labour, followed by the Ministry of Health and Welfare, and currently the National Institute of Population and Social Security Research) had aggregated data on Social Benefit and reported the results.
During the period when the 18 inquiries were conducted by the ILO, socio-economic circumstances around the world had changed; accordingly, the concept of social security had been extended to include the framework of social protection that provides general assistance to all citizens, regardless of their contributions to the social security system and employment status. Reflecting on these circumstances, when the 19th International Inquiry was conducted in 1997, the ILO modified its framework so as to collect data on receipts and expenditure of the systems covering the nine risks and needs (explained below). Our country has collected and published data on cost of social security following the framework of the 19th International Inquiry since the fiscal year 2000. However, since we have long published data aggregated within the framework of the 18th International Inquiry as the “The Cost of Social Security” (“Syakaihosyou-kyufuhi” in Japanese), we continue providing the data based on the old framework as well.
According to the ILO standards used for the 18th and 19th International Inquiries, Social Benefit is defined as the schemes and services that meet the following three criteria:
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The objectives of the schemes must be to grant benefits for at least one of the following risks and needs:
(1) Old age; (2) Survivor; (3) Invalidity; (4) Employment injury (5) Sickness and health; (6) Family; (7) Unemployment; (8) Housing; (9) Public assistance and others.
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The system must have been set up by legislation, which attributes specific individual rights to, or which imposes specified obligations on, a public, semi-public or autonomous body. |
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The system should be administered by a public, semi-public or autonomous body founded by legislation; or by a private body, which has been granted rights to perform legal obligations. |
The ILO published the results of the international inquiries as “The Cost of Social Security” up to the 18th inquiry. Since then, the ILO has been developing a new database named the SSI (Social Security Inquiry), but it has not started to produce regular updates.
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http://www.ilo.org/public/english/protection/secsoc/areas/stat/css/index.htm)
The “Cost of Social Security” based on the ILO standards has been used as a basic material in policy making as well as for a variety of other purposes. Since it will become more and more important in the future to grasp the entire picture of the benefits provided to individuals and their sources of revenue, this statistical report will continue to aggregate necessary data. However, other countries have not regularly updated Social Benefit based on the ILO standards; rather, they have published Social Expenditure based on the OECD standards.
For this reason, when the data published through this statistical report were specified as fundamental statistics on the Statistics Act in July 2012, it was decided to improve the international comparability of the data by enhancing the aggregation of “Social Expenditure” based on the OECD standards.
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Social Expenditure based on the OECD standards.
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OECD started to publish Social Expenditure Statistics in 1996. The OECD defines “Social Expenditure” as “The provision by public and private institutions of benefits to, and financial contributions targeted at, households and individuals in order to provide support during circumstances which adversely affect their welfare.” However, Social Expenditure only includes expenditure made by specific systems and does not include a direct payment for a particular good or service or an individual contract or transfer.
Whether to include expenditure made by any specific scheme into Social Expenditure depends on if it is “social.” Expenditure of a certain scheme is “social” if it satisfies the following two conditions; first, the benefits are expected to address one or more social purposes; and second, the system that makes the provision of benefits either contributes to an inter-personal redistribution or involve compulsory participation.
In Social Expenditure based on the OECD standards, social purpose is grouped into the following nine policy areas.
(1) Old age; (2) Survivors; (3) Incapacity related benefits; (4) Health; (5) Family; (6) Active labour market programmes; (7) Unemployment; (8) Housing; (9) Other social policy areas.
Social Expenditure includes cash benefits such as pensions, income security during maternity leave, welfare benefits, etc., as well as benefits in service or kind, such as childcare, care for the elderly and people with disabilities.
The scope of the OECD standards of “Social Expenditure” is broader than “Social Benefit” of the ILO, and it includes the amount of expenditure not directly spent on individuals, such as expenditure on equipping facilities.
In addition, data on Social Expenditure of other countries have been updated on a regular basis and published up to relatively recent years by each of the nine policy areas. Hence, Social Expenditure based on the OECD standards is an important indicator in terms of making an international comparison of social security expenditure. The main part following this section presents the results of aggregating each of the following category of Social Expenditure based on the OECD standards: (i) “public expenditure” and (ii) “mandatory private expenditure” which is operated by the private sector but prescribed by law.
Social Expenditure data on other countries included in this report are based on the OECD Social Expenditure Database 2012 ed. (http://www.oecd.org/els/social/expenditure)
Lastly, as mentioned earlier, the data collected and published through this statistical report were specified as fundamental statistics on the Statistics Act. Taking this opportunity, it was decided to include necessary explanations about the relationship between the Financial Statistics of Social Security and the SNA (System of National Accounts) based on the UN Standards and concise descriptions of the main terminologies used in the ILO and OECD standards (Refer to the “Appendix” for more details about the terminologies used in both standards) in order to be useful for a wide range of users.
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