Rising Employment Improves Social Budget Balances

Social expenditures rose by about 4 percent in 1988, as a percent of GDP they declined for the first time in four years. The faster pace of employment growth checked the rise in unemployment benefit outlays, old age insurance expenditures were damped by discretionary measures of consolidation. The old-age dependency ratio attained a new high of 600 pensioners per 1,000 active insured. Pensioners suffered small real income losses in 1988, but are one of the principal beneficiaries of the 1988 tax reform.