Abstract
Spain is experiencing sustained economic and social disparities in several areas. Social
spending policies have a heightened responsibility to respond but are challenged by high
public debt and pressures from an aging society. This study takes stock of the level and
effectiveness of public social expenditure from a cross-country and macroeconomic view,
complementing recent targeted spending reviews. The results suggest that social
protection spending should aim to improve redistribution through better targeting the most
vulnerable while more effective education and active labor market policies should aim to
create more equal opportunities and income prospects. In some areas more fiscal resources
are needed. But social spending alone cannot reduce inequality, and efforts also should be
directed toward making the labor market more inclusive.
