Danish satellite accounts - on welfare? Preben Etwil

OECD’s definition “Satellite accounts provide a framework linked to the central accounts and which enables attention to be focussed on a certain field or aspect of economic and social life in the context of national accounts; common examples are satellite accounts for the environment, or tourism, or unpaid household work”

SNA's use of the term  Broadly speaking, there are two types of satellite accounts:  One type involves some rearrangement of central classifications and the possible introduction of complementary elements  The second type of satellite analysis is mainly based on concepts that are alternatives to those of the SNA

First type of satelitte accounts  They do not change the underlying concepts of the SNA in a fundamental way. The main reason for developing such a satellite account is that to encompass all the detail for all sectors of interest as part of the standard system would simply overburden it and possibly distract attention from the main features of the accounts as a whole  Many elements shown in a satellite account are invisible in the central accounts

Second type of satelitte accounts  These include a different production boundary, an enlarged concept of consumption or capital formation, an extension of the scope of assets, and so on. Often a number of alternative concepts may be used at the same time. This second type of analysis may involve, like the first, changes in classifications, but in the second type the main emphasis is on the alternative concepts. Using those alternative concepts may give rise to partial complementary aggregates, the purpose of which is to supplement the central system

Why satelitte accounts? (a)give additional information on particular social concerns of a functional or cross sector nature (b)give complementary and alternative concepts including alternative classifications (c)extended coverage of costs and benefits of human activities (d)linkage of physical data sources and analysis to the monetary accounting system

Structure of satellite accounts 7

Danish ESSPROS – a satelitte accounts?  Cover all social benefits, in a broad sense (including health), and their financing  Are geared to international comparability  Are harmonised with other statistics - particularly the main concepts of the National Accounts  Is organized as a second type of satelitte accounts and constructed as a function one  All data in ESSPROS is extracted directly from the detailed Danish National Accounts system - (most of all from the government sector plus private pensions fonds)

How do we do

Expenditure I  Benefits in kind  In the ESSPROS, social benefits in kind are defined as benefits granted in the form of goods or services made available to protected people, either free of charge or at reduced prices.  This definition is, in essence, in line with the National Accounts' concept of consumption.  In the ESSPROS, expenditure on benefits in kind is broken down as follows:  + Compensation of employees  + Intermediate consumption  + Other taxes on production and other subsidies on production, net  + Social benefits in kind  - Sale of goods and services

Expenditure II  Cash benefits  In the ESSPROS, cash social benefits are defined as an amount paid out in cash which does not require documentation of actual expenditure. If, however, payment is subject to documentation of actual expenditure (a form of outlay), the payment will be considered a benefit in kind.  In order to make the ESSPROS and the Danish system of national accounts (ENS) as comparable as possible, Denmark has chosen to grant equal status to "Cash benefits" and the National Accounts' "Social income transfer to households"- with very few exceptions.

Revenue  Receipts of an economic nature are grouped as follows:  social contributions  general government contributions  transfers from other schemes  other receipts  These receipts are further broken down by sector:  corporations  general government contributions  households  non-profit institutions  rest of the world

Not (yet) covered by ESSPROS  Number of social services (child, family and elder care in hours/day etc.)  Number of hospital or medical patients  Numbers of hospital treatments  Number of employees (skilled/unskilled)  Numbers of volunteers in social and non profit institutions