Employment in services, European countries, government expenditures by COFOG, panel data analysis

The article aims to analyse government expenditures and employment in selected public services in European countries and then to examine the impact of government expenditures on employment in services. An analytical approach is used (comparative analysis, regression analysis of panel data) to examine government expenditures (total expenditures, expenditures by function) and employment in services in European countries in 2002 to 2021. In 2002-2021, the extent of allocated total government expenditures (in % of GDP) in 29 European countries had a growing trend. Also, the analysis of employment in selected areas of public services showed a moderately growing trend on average in European countries. Results using panel data analysis confirmed that European countries with a higher and lower economic level differ not only in their structure but also influence of specific categories of government expenditures. In the case of employment in services, European countries with lower economic level showed a significant effect of seven out of the ten categories of government expenditures. In European countries with a higher economic level than the EU average, a significant effect of five categories of government expenditures on employment in services manifested. For both groups of European countries, the effect of the analysed government expenditures on employment in services can be evaluated as mixed. The achieved findings can be beneficial especially for the creators of national public policies, but also for other interested entities.