Social security, social impact and economic performance: A farewell to three famous myths. - ILO 2006

The paper first revisits the standard economic arguments on the potential inter-relationship between social security and economic performance, then evaluates some of the statistical evidence and finally applies some simple logic to refute three of the major myths with regard to the relationship between social protection and economic performance. These are: (1) at each stage of development societies can only afford a certain level of social expenditure (the affordability myth); (2) economic growth will automatically reduce poverty (the trickle-down myth); (3) there is a trade-off between social expenditure and economic efficiency (the trade-off myth).