placestats

Old-age spending vs. Redistribution

Fades after adjusting for income

Across 40 countries, Old-age spending and Redistribution rise and fall together at r = +0.60 (on a scale from −1 to +1, where 0 means no link). Comparing only countries with similar income (GDP per person) leaves r = +0.66, which could easily be chance (q = 0.085, allowing for the many pairs tested, and allowing for countries in the same region being alike).

Comparing countries across the middle half of old-age spending, 5.47% to 9.79% of GDP, redistribution is 9.03% reduction in the Gini higher at the top of that range than the bottom. Comparing only countries with similar national income, the gap is 8.9% reduction in the Gini.

Link before adjusting (r)+0.598p = 4.6e-5 · 40 countries
After adjusting for national income+0.657p = 5.5e-6 · likely range [+0.43, +0.81]
p, allowing for regions0.013standard error 0.155 · 5 regions
Check for luck (q)0.085across 12,497 pairs

How to read these.r runs from −1 (one goes up as the other goes down) to +1 (they rise together), and 0 means no link. Adjusting for national income means comparing countries with the same GDP per person, so differences in wealth can’t explain the link. Income is used in percentage terms, since an extra $1,000 means more to a poor country than to a rich one. p is how likely a link this strong would be if there were really none. Below 0.05 means it is unlikely to be chance. Very small values are written in short form: 1.1e-32 means a decimal point followed by 31 zeros and then 11, so very close to zero. The likely range is where the true figure probably lies, and a range that crosses zero means the link could easily be chance. Countries in the same region tend to resemble each other, so the third figure allows for that, which gives a fairer p. The standard error is the typical size of the error in r. Finally, testing this many pairs means some will look strong by luck alone. A q below 0.05 means this link is unlikely to be one of those.

Old-age spending · % of GDPlink with income +0.17 · independent
Redistribution · % reduction in the Ginilink with income +0.50 · moderate

“Link with income” is how closely each measure tracks GDP per person across countries, from −1 to +1.

Every country as a dot

Old-age spending · % of GDP →Redistribution · % reduction in the Gini →2.75%13.7%3.77%48.3%Australia: 4.46% of GDP, 27.7% reduction in the GiniAustria: 13.2% of GDP, 41.4% reduction in the GiniBelgium: 10.2% of GDP, 47.7% reduction in the GiniBulgaria: 8.09% of GDP, 26% reduction in the GiniCanada: 5.59% of GDP, 29.3% reduction in the GiniSwitzerland: 6.32% of GDP, 21.2% reduction in the GiniChile: 3.28% of GDP, 8.68% reduction in the GiniCosta Rica: 4.58% of GDP, 12.6% reduction in the GiniCzechia: 7.96% of GDP, 43.5% reduction in the GiniGermany: 9.94% of GDP, 38.7% reduction in the GiniDenmark: 9.27% of GDP, 37.5% reduction in the GiniSpain: 10.3% of GDP, 34.4% reduction in the GiniEstonia: 6.82% of GDP, 33.5% reduction in the GiniFinland: 13% of GDP, 47.2% reduction in the GiniFrance: 12.4% of GDP, 42.2% reduction in the GiniUnited Kingdom: 7.41% of GDP, 29.7% reduction in the GiniGreece: 13.6% of GDP, 36.9% reduction in the GiniCroatia: 7.39% of GDP, 33.1% reduction in the GiniHungary: 7.33% of GDP, 29.4% reduction in the GiniIreland: 2.75% of GDP, 41.2% reduction in the GiniIceland: 3.29% of GDP, 35.7% reduction in the GiniIsrael: 4.92% of GDP, 23.2% reduction in the GiniItaly: 13.7% of GDP, 36.2% reduction in the GiniJapan: 8.29% of GDP, 34.1% reduction in the GiniKorea, Rep.: 3.62% of GDP, 18.2% reduction in the GiniLithuania: 6.44% of GDP, 29.7% reduction in the GiniLuxembourg: 7.19% of GDP, 35.7% reduction in the GiniLatvia: 7.82% of GDP, 28.1% reduction in the GiniMexico: 5.11% of GDP, 3.77% reduction in the GiniNetherlands: 7.19% of GDP, 34.2% reduction in the GiniNorway: 8.43% of GDP, 39.5% reduction in the GiniNew Zealand: 5.06% of GDP, 28.7% reduction in the GiniPoland: 9.74% of GDP, 41.9% reduction in the GiniPortugal: 11.1% of GDP, 36.5% reduction in the GiniRomania: 8.18% of GDP, 38.1% reduction in the GiniSlovak Republic: 7.15% of GDP, 48.3% reduction in the GiniSlovenia: 9.55% of GDP, 42.4% reduction in the GiniSweden: 10.1% of GDP, 33.1% reduction in the GiniTurkiye: 4.88% of GDP, 18.6% reduction in the GiniUnited States: 6.8% of GDP, 22.1% reduction in the GiniAUTCHLCRIFINFRAGRCIRLISLITAMEXSVK

best-fit line line after adjusting

Four ways to measure the link

MethodrpCountries
Standard (Pearson), not adjusted+0.5984.6e-540
By rank (Spearman), not adjusted+0.6408.7e-640
Standard (Pearson), adjusted for national income+0.6575.5e-640
By rank (Spearman), adjusted for national income+0.6526.8e-640

The rank version uses only each country’s place in line, from lowest to highest, so a few extreme countries count for less. The adjusted and unadjusted versions use the same 40 countries: those that report both measures and GDP per person. So the gap between them comes from the adjustment, not from a change in which countries are counted. Drop in the size of r after adjusting: -0.059 (a minus sign means it grew).

How solid is it?

Leaving out one country at a time, r ranges from +0.630 (without CHL) to +0.712 (without SVK). The bar above shows that range on a scale from −1 to +1, with the solid line at the full result. The single country that moves r most: SVK (+0.055).

Within each region

Countries are not separate, unrelated cases, and neighbors share a lot. A link that holds inside each region is far more believable than one that shows up only when comparing regions.

nr
Europe & Central Asia30+0.46

By income third

If the link shows up only in the richest third of countries, it is a feature of rich countries, not a general pattern.

nr
Poorest third14+0.53
Middle third13+0.82
Richest third13+0.41

By largest religious group

Countries grouped by a label they share, such as main religion, rather than by a number. Groups of fewer than twelve countries are not shown. These groups differ in income, region and history all at once. So a gap between them is a place to start asking questions, not an answer.

nr
Christians33+0.63

Without outliers (countries far outside the middle half of countries on either measure, by more than one and a half times the width of that middle half): r = +0.613 after dropping 2 countries.

Two series, one country

Both measures over the years for one country you pick. The two charts are stacked so they share only the years along the bottom.

Loading…

Over time, within countries

Everything above compares countries with each other at one moment. This section compares each country only with itself over 13years. So a link here can’t come from anything about a country that stays the same, such as its history, geography, institutions or culture.

The link shows up within countries over time (r = +0.318) but mostly disappears in year-to-year changes (r = +0.090). That points to slow trends particular to each country, not the two measures moving together from year to year.

Across countries (adjusted)+0.657for comparison
Within countries+0.342each country vs itself
…and vs the same year elsewhere+0.318q = 0.026 · 37 countries
Year-on-year changes+0.090q = 0.412
Read with care.
  • Almost all of this indicator's variation is between countries, not within them, so the within-country estimate rests on a small part of the data.
  • The association is much weaker in year-on-year changes than in levels, which points to shared country-specific trends.

379 country-years (one country in one year), 37 countries, 2011–2023, about 10 years each on average. Share of the variation that happens within countries over time: 3% for Old-age spending, 4% for Redistribution. The margins of error allow for each country appearing many times, and for each year’s value being close to the year before.

Year-to-year changes are a cautious test, not a final answer. Looking only at changes from one year to the next removes each country’s own trends. But it also makes measurement mistakes louder, which pulls the results toward zero. A near-zero result here is weak evidence of no link, not proof.

With one measure years behind the other

0.40−0.4-40+10years Redistribution trails Old-age spending →lag -4: r = 0.065 (n = 225)lag -3: r = 0.039 (n = 267)lag -2: r = 0.175 (n = 309)lag -1: r = 0.276 (n = 343)lag +0: r = 0.318 (n = 379)lag +1: r = 0.326 (n = 412)lag +2: r = 0.289 (n = 433)lag +3: r = 0.182 (n = 432)lag +4: r = 0.061 (n = 430)lag +5: r = -0.024 (n = 428)lag +6: r = -0.064 (n = 426)lag +7: r = -0.093 (n = 423)lag +8: r = -0.121 (n = 420)lag +9: r = -0.094 (n = 417)lag +10: r = -0.033 (n = 410)

Same year (lag 0): +0.318. A peak away from zero does not show which comes first. These series change slowly — this year’s value is close to last year’s. That makes the curve smooth and nearly symmetric, whatever produced the data. Even a sharp peak at one lag (a gap of some years) would not prove that one measure changes the other.

The data


% of GDP
% reduction in the Gini		Years
Italy ITA13.7%36.2%2021, 2023
Greece GRC13.6%36.9%2021, 2023
Austria AUT13.2%41.4%2021, 2023
Finland FIN13%47.2%2021, 2023
France FRA12.4%42.2%2022, 2023
Portugal PRT11.1%36.5%2021, 2023
Spain ESP10.3%34.4%2021, 2023
Belgium BEL10.2%47.7%2021, 2023
Sweden SWE10.1%33.1%2021, 2023
Germany DEU9.94%38.7%2021, 2022
Poland POL9.74%41.9%2021, 2023
Slovenia SVN9.55%42.4%2021, 2023
Denmark DNK9.27%37.5%2021, 2022
Norway NOR8.43%39.5%2021, 2022
Japan JPN8.29%34.1%2022, 2021

OECD databases as named on each indicator: PISA, Social Expenditure Database (SOCX), Income Distribution Database, Development Assistance Committee statistics, Family Database, Government at a Glance, Corporate Tax Statistics, employment and environment statistics
OECD databases as named on each indicator: PISA, Social Expenditure Database (SOCX), Income Distribution Database, Development Assistance Committee statistics, Family Database, Government at a Glance, Corporate Tax Statistics, employment and environment statistics

Sources

Old-age spending

Public spending on old-age benefits

OECD · via Our World in Data · CC BY 4.0 (OECD terms and conditions) · updated annual, except the snapshots noted per indicator

Public pensions and other benefits for older people. It mostly reflects how old a country is and how its pensions are set up. That is why its strongest link is with the share of people aged 65 and over.

Redistribution

Reduction in the Gini coefficient from taxes and transfers

OECD · via Our World in Data · CC BY 4.0 (OECD terms and conditions) · updated annual, except the snapshots noted per indicator · comparable from 2011 only

The Gini before taxes and payments minus the Gini after them, as a share of the first. It shows how much of the inequality produced by the market the government removes. It is built from the before-tax Gini above, so their pair is built from the same numbers and flagged. No "better" direction is set: a country may redistribute little because its market incomes are already equal.

How this was computed

Data used: most recent value in 2010-2025; values come from 2019–2024. To adjust for income, each measure is first predicted from GDP per person (in percentage terms, on a log scale) with a straight-line fit. Only what is left over is then compared. This is called a partial correlation. The line is drawn the standard way (ordinary least squares), which picks the line that comes closest to all the countries at once. The error margins allow for countries in the same region resembling each other, using 5 World Bank regions. The q-value corrects for testing all 12,497 pairs at once, using the Benjamini–Hochberg method. Underlying data last updated DYB 2024. How the country data works · explore Old-age spending and Redistribution

This page shows that two measures go together. It does not show that Old-age spending changes Redistribution, or the reverse. These figures also describe countries, not individual people. See the ecological fallacy.

More links with Old-age spending or Redistribution