MACRO-ECONOMIC RELEVANCE OF INCLUSIVE SOCIAL PROTECTION SCHEMES – Case study First, we should emphasise a factor which is specific, but important in this equation: the fact that many families benefiting from social assistance do not have a consumption behaviour equivalent to the pattern resulting from the analysis of Romanian macroeconomic indicators, because the share of low­income families in the total number of social assistance beneficiaries is much higher than the average per economy, and these families have a marginal propensity to save that is close to zero. On the other hand, the unemployment benefit, the family support allowance and the guaranteed minimum income, which are directed mainly towards low-income families, between them only account for 15% of the social benefit payments calculated on the basis of RSI. The child care leave benefit, the stimulant for early return to work and the benefit for disabled persons are not means-tested, i.e. entitlement does not depend on low income. Still, taking into account the fact that the relative poverty rate was 23.5%¹⁷ in Romania in 2018, we can assume that the share of social assistance payments to families under the poverty threshold is at least 35%¹⁸. Indeed, for the families under the poverty threshold, additional earnings are used to cover some of the basic needs, which is to say for consumption, resulting in a null marginal propensity to save. For instance, INSSE data for the category"unemployed" show that in the last three years 95.8% of their additional incomes have been spent, resulting in a marginal propensity to save of only 4.2%. Along the same lines, beneficiaries of guaranteed minimum income are expected to have a marginal propensity to save close to 0%. It is also true that, for vulnerable social groups, the highest share of consumption is directed towards food products from local agriculture and paying utilities, reducing the marginal propensity to import to that level. It is impossible to precisely assess the share of import goods and services consumed by low-income households, but we believe that the assumption that this is lower than the average per economy is justified. Also, the consumption structure of low­income families, especially those from rural areas, suggests that the marginal tax rate for them is lower than the average per economy, a result of the higher share of food products(having a lower VAT) in the basket of goods, but mostly due to acquisitions made in the informal rural economy. Thus, a calculation of the multiplier that allows an assessment of the impact of increasing RSI on the economy has to take into account the particularities of the group that benefits from payments calculated on the basis of RSI before considering the macroeconomic structure of Romania. In other words, the first level of using resources – the beneficiaries of payments calculated on the basis of RSI – has a pattern of consumption and saving different from the general Romanian population, the latter being relevant starting with the second level of using resources. Thus, considering the particularities of social aids beneficiaries at the first level of consumption and the macroeconomic structure of Romania starting with the second level of consumption, based on the last three years' indicators, we can estimate the multiplier showing the extent to which the growth of household incomes due to increasing RSI will stimulate economic growth to be around 0.93¹⁹, in other words it is to be expected that the growth of social benefits stemming from increasing ISR is almost one-for-one reflected in economic growth. Starting from the assessment that social assistance spending will grow by 1 percent of GDP, due to increasing ISR from RON 500 to RON 1200, a positive impact on the economy of around 0.9 percent of GDP may be expected. Table 5 Estimate of THE multiplier applicable to increasing social benefits First level of consumption: assumption for families benefiting from social assistance benefits²⁰ Marginal propensity to save 6.8% Marginal propensity to import 41% Marginal tax rate 6.4% Multiplier without taking into account the consumption pattern typical of the first level Multiplier taking into account the consumption pattern typical of the first level Data source: INSSE(Gross Domestic Product, Total Monthly Average Incomes and Total Monthly Average Spending for a household, by social groups) Starting with the second level of consumption: average 2017-2019 macro indicators 10.4% 49.7% 7.7% 0.48 0.93 1177