Table 1.

The effect of fiscal consolidation on total and social expenditure (POLS and FE)

	POLS		FE
	(1)	(2)	(1)	(2)
	Total expenditure	Social expenditure	Total expenditure	Social expenditure
${\mathit{exp}}_{it-1}$	0.969*** (0.013)	0.929*** (0.042)	0.507*** (0.089)	0.506*** (0.091)
${\mathit{fa}}_{\mathit{it}}$	−0.464*** (0.135)	−0.147*** (0.051)	−0.459*** (0.104)	−0.128*** (0.049)
${\mathit{gdpg}}_{\mathit{it}}$	−0.041* (0.025)	−0.002 (0.004)	−0.411** (0.052)	−0.037** (0.016)
${\mathit{corrup}}_{\mathit{it}}$	−0.126 (0.166)	−0.020 (0.066)	−1.449** (0.536)	−0.217 (0.203)
${\mathit{debt}}_{\mathit{it}}$	−0.010* (0.006)	−0.004** (0.001)	−0.049* (0.027)	−0.013* (0.008)
${\mathit{eldy}}_{\mathit{it}}$	−0.027 (0.031)	0.012 (0.010)	−0.112 (0.278)	0.123 (0.121)
${\mathit{young}}_{\mathit{it}}$	−0.041*	−0.011	0.076	0.059
	(0.023)	(0.007)	(0.154)	(0.074)
constant	3.317*** (1.191)	1.234** (0.482)	21.627*** (5.261)	2.619* (2.434)
N	207	207	207	207
R-squared	0.959	0.867	0.448	0.340
groups	23	23	23	23
Hausman			15.04**	16.84***

Robust standard errors are in parentheses Significance level at which the null hypothesis is rejected: p < 0.1*; p < 0.05**; p < 0.01***. The dependent variable is total government spending in model (1) and social spending in model (2)