Methodology 

Social protection in Catalonia uses up more than a fifth of the country's gross domestic product. The aim of this publication is to describe the financial flows that enable these protective mechanisms and their posterior distribution to function.

This information is presented in such a way that the data is comparable with other countries and territories, thereby adopting the methodology of the European system of integrated social protection statistics (ESSPROS) designed by Eurostat in 1981 and revised in depth in 1996.

This publication adopts the criterion of presenting five-yearly series, which limits the revision of the data due to improvements in sources of information, but also due to variations in the methodology. This instability is motivated, in part, by evident methodological difficulties, but also by the major dynamism of social protection systems, along as the fact these are often the centre of attention for public opinion and political authorities.

The accounts are published in five groups of tables:

1. Two basic tables detailing social protection income and expenditure at their maximum level of conceptual disaggregation.
2. Twenty-two tables of overall analysis that present social protection expenditure and income in accordance with the main categories of classification and functions, and in relation to the gross domestic product, the magnitudes corresponding to Spain as a whole, the population and the evolution of prices.
3. Fourteen tables of analysis by groups of social protection systems, which present social protection expenditure and income by the main categories of classification and functions. The overall figures are shown for each system along with their proportions, as well as tables showing transfers between them.
4. Nine tables of analysis by management units in which, for each criterion for grouping units (all management units, of a public nature and dependent on the Generalitat de Catalunya) social protection expenditure and income are presented by the main categories of classification and functions. The overall figures for each system are shown along with their proportions compared with the units as a whole.
5. Forty-three tables of territorial analysis in which the social protection income and expenditure figures of Catalonia are compared with those of Spain, and the European Union with fifteen, twenty-five and twenty-seven countries. The expenditure tables are classified by whether they analyse current expenditures, benefits in general or benefits on the basis of their specific functions. The income tables are classified by whether they show the overall figures, the proportions by the main categories of classification or by the sector of origin. The expenditure figures are relativized in accordance with the population and price level (using purchasing power units) or the gross domestic product.

This data is accompanied by the methodological information required to make good use of the same and definitions of the concepts sustained by the methodology used.

In addition, a chapter has been produced showing the main results and highlighting the most characteristic elements of the evolution of social protection in Catalonia during the years covered here.

A clearly significant element is the importance of the solidarity flow in relation to the rest of Spain, which is revealed in these accounts whereas otherwise it is concealed in the state social protection accounts. Since 1991 (the year when the first ESSPROS accounts were first produced for Catalonia), it has been noted that Central Administration's contribution to funding social benefits for Catalans has been considerably below the average for Spain, although the eruption of the economic crisis in 2008 has produced a drastic transformation in the absolute figures.

It is remarkable to note that in the years before the economic crisis, there was a negative contribution by the Central Administration to Catalan social protection. This negative figure was fundamentally due to formal aspects and accounting criteria, but it also obviates a reality that is worth highlighting: the Catalan social protection system has a greater capacity for self-finance than the average for the Spanish system. Therefore, considering the "single till" principle that is applied to the Spanish Social Security system, a very large economic solidarity flow is established.

The construction of the European system of integrated social protection statistics (ESSPROS) is the European response to a long-felt need, and one that was never entirely satisfactorily resolved, i.e. to possess homogenous measures of protective efforts on different countries.

In order to overcome the limitations of statistics on the cost of Social Security or of statistics that evaluate public social expenditure, the ESSPROS adopts the broadest concept of "social protection".

In 1981, a methodology was prepared that was used when drafting the annual accounts for the next 15 years. Over this time, several deficits in this methodological approach were noticed, and soon work got underway on an in-depth revision that concluded in 1996 with the appearance of the SEEPROS Manual.

The data presented have been processed in accordance with this latter methodological guide, whose main elements we shall cite below.

1. The concept of social protection

According to SEEPROS, the concept of social protection "… includes all interventions by public or private bodies aimed at lightening the burdens that an established series of risks or needs pose for households and individuals, as long as there is no simultaneous and reciprocal or individual agreement".

This definition is positively complemented by the list of functions (or risks and needs) of social protection, which, by agreement, include the following:

Illness/medical care

Income maintenance and support in cash due to a physical or mental illness, with the exception of cases of disability. Medical care aimed at conserving, re–establishing or improving the health status of the protected persons.

Disability

Income maintenance and support in cash or in kind (except for medical care) related to the disability of physical or psychologically handicapped people.

Old age

Income maintenance and support in cash or in kind (except for medical care) related to old age.

Survival

Income maintenance and support in cash or in kind (except for medical care) related to the death of a family member.

Family/children

Assistance in cash or in kind (except for medical care) related to pregnancy, birth and adoption, care of children or other family members.

Unemployment

Income maintenance and assistance related to the status of unemployment.

Housing

Aid to finance a home.

Social exclusion not included in any other category

Benefits in cash or in kind (except for medical care) aimed at combating social exclusion, as long as it is not included in any other category.

It is worth pointing out the following notes with regard to this list of social protection categories:

• Interventions by both public and private entities are included, but direct transfers between households or individuals are excluded.
• Interventions in which the beneficiary is required to simultaneously provide something for an equivalent value in exchange are not included. In the case that the return is only part of the value of the benefit, this shall be subtracted from the value of the benefit.
• Insurance policies that are privately contracted by individual or households exclusively in their own interest are excluded.
• Interventions in the field of education are not included, although social protection is considered an important part of the expenditure on infant education, given its partially protective nature.
• Remissions, deductions and other tax allowances related to social protection are not included. In this category, there is an exception with the tax deduction for childbirth that has been established since 2003 on the income tax of physical persons. The Ministry of Labour has decided to tally this tax deduction as social protection because it is universally applied.

2. Social protection systems: Basic unit of analysis

A social protection system is a specific series of norms based on one or several institutional units that govern the supply of social benefits and their financing. Ideally, each system should provide protection against a risk or need and should cover a single specific group of beneficiaries.

Social protection systems constitute the basic unit of data analysis in SEEPROS.

The determination of the systems to be considered in a specific territorial unit is made in accordance with the legal reality, but also with the empirical possibilities for obtaining separate breakdowns of the data in the complete accounts.

The result of this compromise between what is desirable and what is feasible is the list of systems that are considered when producing the accounts for Catalonia:

It is worth pointing out that social protection systems are only in charge of redistributing but not producing services, despite the fact that the same institutional unit might perform both functions at once.

These systems can be classified in different ways according to the different criteria applicable, which include:

According to decision-making

The basic categories are public and private systems.

According to whether the system is legally compulsory

Fundamentally, they can be classified into compulsory and non-compulsory.

According to the right to benefits

This classifies systems into contributory and non-contributory.

According to the scope of coverage

The basic systems are universal, general or special.

According to the level of protection

This criterion classifies systems into basic and complementary.

3. The institutional units that manage social benefits

Each social protection system may be managed by one or several institutional units, which are the basic source of information for drawing up the accounts and are often the clearest reference for users of the data. For this reason, the data are also presented aggregated by institutional units, as well as by sub-groups within them.

The institutional units have been grouped according to the following criteria:

According to the nature

They are classified into public and private.

According to the dependence

This criterion primarily gives information on the protective activities of units linked to the Generalitat de Catalunya.

In Catalonia, the institutional units that take part in managing social protection programmes are the following:

4. The accounting structure of spending

The most basic level o which SEEPROS classifies social protection spending is as follows:

The "Other expenditures" in social protection primarily include the financial expenditures of the social protection systems.

In turn, social benefits spending can be classified by different criteria that can be processed in a superimposed or alternative fashion:

• Social protection categories. Listed above
• According to whether the benefit is conditioned or not upon the economic resources of the beneficiary/ies.
• According to the essence of the benefit, which classifies them into benefits in cash, in kind.
• Benefits in cash may be classified according to whether they are periodic or occasional.
• Finally, for each social protection category there is a detailed list of the types of benefits that calls for specific annotations for the most common benefits (such as retirement pensions, leaves of absence for illness, or household aid for handicapped people).

5. Income in the social protection systems

Income in the social protection system is classified according to the following basic structure:

At the same time, the payments into the Social Security system by employed persons can be classified into effective or charged, depending on whether there has previously been a payment by the employed person to an insurance company which pledges to cover the benefit should the need arise, or whether the employer directly defrays the coverage of the benefit.

Within the payments by protected persons, there is a distinction between those paid by salary or wage earners, by self-employed persons and by people in a passive situation.

Contributions by public administrations are classified according to whether they come from taxes expressly created to finance social protection or from general public income.

Other income from social protection systems fundamentally includes income produced by property revenues.

Finally, the income is classified according to the type of entity it comes from: the state, local or regional administration; Social Security, non profit entities, companies, households or the rest of the world.

6. The method for calculating contributions by the central administration

As SEEPROS is a methodological framework designed to draw up the accounts in the state-wide social protection systems, it does not provide solutions for some of the problems we face when drawing up the statistics for Catalonia, where more than three-fourths of the expenditures come from systems that clearly draw from state funding. This is the primarily the case of the Social Security pension systems and the unemployment benefits system.

The regionalisation of this state funding can take place via a variety of methods that may lead to different ways of describing the same situation.

In this case, the Statistical Institute of Catalonia has chosen the criterion of adjusting the financing from the Catalan sub-system to its effective spending in Catalonia, plus the savings —or loss of savings— from the state system that can be attributed to Catalonia.

This methodological decision requires that the following processes be carried out:

• Estimate of savings —or loss of savings— that can be attributed to Catalonia generated by these systems in Spain as a whole. The evolution in this magnitude is determined primarily by the financing policy of Social Security. It takes into account the reserve fund that Social Security created in 2000; and it is calculated by applying the proportion of payments to the state-wide magnitude.
• The contribution by the central administration is determined as the difference between the resources used (expenditure plus savings) and the remaining income directly generated in Catalonia by the system (primarily payments into the system). This procedure makes it possible for there to be negative contributions, which are indeed commonplace in many of the contributory Social Security systems in Catalonia.

7. The reference socio-demographic information when calculating the indicators

As stated earlier, the social protection accounts provide a detailed description of the country's protection effort. In fact, most references to this statistic occur in relation to comparisons of the data for different countries.

As mentioned above, despite the fact that the social protection accounts furnish a detailed description of countries' efforts to protect their populations, the majority of references on these statistics are related to whether they can be compared among different countries.

Aware of this characteristic, a high number of tables have been included in this presentation that are relativised for the different socio-demographic indicators.

This gives a prominent role to the values of these indicators, which are not always totally agreed upon and stable.

For Spain, other countries and clusters in the European Union, the official values published by Eurostat have been used, while for Catalonia the series that are comparable to these values have been used.

Below is a list of the sources chosen for Catalonia:

Population

Current population estimates on July 31. INE.

Gross domestic product

Harmonised series of Spanish regional accounts. Base 2008. INE.

Although Idescat produces its own series for the gross domestic product, in this publication INE figures are used for comparability purposes.

Purchasing power units

In Catalonia the conversion factors to purchasing power units assigned to Spain are applied.