building social protection and labor systems€¦ · · 2018-04-17capital, skills and labor ......
TRANSCRIPT
For Protection and Promotion: The Design and Implementation of Effective Social Safety Nets
Ruslan Yemtsov
December 2014 Washington, D.C.
Based on the World Bank SP&L 2012-22 Strategy Background Paper by David Robalino, Laura Rawlings and Ian Walker.
Building Social Protection and Labor
Systems
1
System: simplifying
2
Something complex where there are different parts working
together to generate outcome / or functions
Where the whole is bigger than sum of individual parts
Something that exists long enough / is sustained over time /
can adapt to changing environment
… anything that we like….
What do we mean by Social Protection
and Labor?
Social Protection
Social
Insurance
Social
Safety
Nets
Labor
Policy
Schemes that deliver
benefits based on
contributions of their own
members; pensions,
unemployment insurance.
Regulatory aspects
of labor; active labor
market policies,
income support for
the unemployed
Noncontributory
transfer programs
targeted to the poor;
cash transfers, food
stamps, in-kind
transfers, school
feeding programs, etc.
Why systems?
4
Global Challenges
Global Gaps
Operational efficiency
Global challenges
Depth of extreme poverty:
Poverty gap at $1.25/day (PPP, %, log scale)
INCREASING
RISK
ACCELERATED
AGING
PERSISTENT POVERTY
BULGING
YOUTH
POPULATIONS
5
Lack of Knowledge on how to
Address these Challenges
The target of 3% by 2030 Sub-Saharan Africa can and should take a leading role
* Preliminary
51
59 58
49 48
43
35
29
19 18
0
10
20
30
40
50
60
70
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2010*
Popula
tion l
ivin
g o
n l
ess
than
$1.2
5 a
day
, 2005 P
PP
(%
)
Sub-Saharan
Africa
World
The target of 3% by 2030 Is this target feasible given recent history? Yes
Last 20 years: poverty has fallen about one percentage point per year
Requires at least keeping the pace of average consumption growth since 1999 (4.3%
per year) with no increase in inequality
Technological changes increasing effectiveness of poverty reduction efforts
Evidence of job creating growth in LICs and MICs and effective social policies
Is reaching this target certain? No
Global shocks and natural disasters could lower consumption growth
Within country inequality may increase
-2
0
2
4
6
8
10
Ann
ual C
onsu
mpt
ion
Gro
wth
(%
)
Income growth of the bottom 40% (Annual household consumption rate, early 2000s - late 2000s)
Average income growth Income growth of the bottom 40%
First — Analyze performance by income
growth of the poor
Second — Analyze performance of the
poor compared to the average
4,989
6,364 6,491 7,430
6,358
19,585
25,510
31,899
39,545
42,486
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
PP
P c
onst
ant
2005
inte
rnat
iona
l $
United States
Income Growth of the Bottom 40%
1967-2011: 0.55% p.a.
2000-2011: -1.41% p.a.
GDP per capita
Mean income of
bottom 40%
Côte d'Ivoire
Egypt
Bangladesh
Rwanda
Brazil
Mexico
Indonesia South Africa
China
Russia
-2
0
2
4
6
8
10
12
-2 0 2 4 6 8 10 12
Con
sum
ptio
n G
row
th o
f th
e B
otto
m 4
0% (
%)
Consumption Growth of the Total Population (%)
Consumption growth of the bottom
40% is positive and faster than the
average
Consumption growth of the bottom
40% is positive but slower than the
average
Growth in incomes of the poor requires overall growth.
But the same level of growth might result in different outcomes.
Growth
Job
Creation
Poverty
Reduction
Opportunities
For All
Transfers Taxes
Pathways
Growth, Jobs, Social Protection and Poverty Last decade: reductions in poverty mainly due to labor market and transfers
0.4 0.4 0.5 0.3 0.6
0.4
2.9
1.9
1.0 1.0
1.4
0.8
0.5
0.9
0.3 0.6
0.1
0.6
0.2
-0.2
0.4
-0.4 -0.2
-1.0
0.0
1.0
2.0
3.0
4.0
Peru(2005-2009)
Nepal(1996-2003)
Ghana(1998-2005)
Brazil(2001-2009)
Bangladesh(2000-2010)
Thailand(2000-2009)
Ann
ual P
over
ty R
educ
tion
(pe
rcen
tage
poi
nts)
Demographic Change Labor Income Non-Labor Income Other
Source: Inchauste, Gabriela & Olivieri, Sergio & Saavedra, Jaime & Winkler, Hernan, 2012. “What is behind the decline in poverty since 2000 ? evidence from Bangladesh, Peru and Thailand," Policy Research
Working Paper Series6199, The World Bank.
J.P. Azevedo, G. Inchauste, S. Olivieri, J. Saavedra and H. Winkler, "Is labor income responsible for poverty reduction? A decomposition approach". Background paper for the WDR 2013. Forthcoming.
2015
Bol
ivia
ESF
198
7
Headline 2008
Food & Fuel Price Increases, Financial Crisis Hits
Bra
zil
and
Mex
ico
star
t C
CT
E
ast A
sia
+ F
inan
cial
cri
sis
Firs
t C
CT
Loa
ns
WB
SP
Str
ateg
y pa
per
Eth
iopi
a P
SNP
Indi
a N
RE
GA
W
DR
200
6
Cri
ses
World Bank Index of Commodity Prices
0
100
200
300
400
500
2000 2001 2002 2003 2004 2005 2006 2007 2008
(June 2008
Energy Food Grains
2015
Bol
ivia
ESF
198
7
Headline 2008/9
2/3s developing countires improve SSN during crisis
Bra
zil
and
Mex
ico
star
t C
CT
E
ast A
sia
+ F
inan
cial
cri
sis
Firs
t C
CT
Loa
ns
WB
SP
Str
ateg
y pa
per
Eth
iopi
a P
SNP
Indi
a N
RE
GA
W
DR
200
6
Cri
ses
* Counts CTs with clear start dates only; green countries have had or currently have a CT
2000 2012 9 countries,
25 programs* 41 countries,
245 programs
The revolution is happening where needs
are greatest
2010 35 countries
123 programs
15
3 7 8
14 17
19
26
42
55
67
0
10
20
30
40
50
60
70
80
1997-2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Planned
20%
Not
reported
30%
Available
50%
An increasing attention to systems: SPL strategies
are instituted around the world
Recap
17
Social protection is central to poverty reduction
And to shared prosperity
To respond to other challenges (shocks, technology…) new
ways to protect people are needed
There is an increasing commitment to social protection,
but…
SPL challenges
Low Coverage, particularly in low-income
countries
Large variance across and within regions
75 70 65
46 32
22
12 17
9
21
22 43
13 13
23 27
46 33
0 0 3 5 0 2
SS Africa MENA SAR LAC EAP ECA
No transfer
Only social insurance
Only social assistance
Only labor market programs
(% of households that receive)
Social welfare or related ,
35%
Social security/ labor 9%
Health, 4% Education, 2%
Social Fund, 1%
Other, 4%
Outside govern-
ment, 45%
Fragmented
Programs Example: where cash transfer programs in Sub-
Saharan Africa are based
18
Source: Household survey data from 64 countries
Fragmentation of SPL…
19
…leads to coverage gap
20
This is how the system should
work. Does it? STEP framework (Source: World Bank 2010)
CCTs:
Nutrition
Risk
mitigation
and
innovation:
Social
Insurance
Active
labor
market
programs:
Training
CCTs:
Education
Labor
regula-
tions
SPL System for Skills
Recap: Global Gap What to do?
Fragmentation Build appropriate, country-specific,
social protection systems
Coverage
Expand coverage, especially in low-
income countries and
fragile states
Weak link to
productivity
Promote links to human
capital, skills and labor
market insertion
Knowledge
Expand investment in results
and knowledge
22
Social Protection and Labor System
Social Insurance
Labor Market Programs
Social Assistance
23
•Last-resort social assistance
programs (LRSA)
• Family and child benefits
• Social pensions
•Heating and housing allowances
• Disability allowances
•Labor market services
• Training
•Employment incentives
• Supported employment and
rehabilitation
•Direct job creation
•Start-up incentives
•Unemployment benefits
• Early-retirement benefits
•Old age
•Disability
•Survivor
•Sickness
•Family/children
Different way to classify functions of SP
system
Promotion
Opportunity
Security
Equity ALMPs:
Training
Credit
Intermediation Social assistance:
In-kind transfers
Cash transfers
Subsidies
Social insurance:
Pensions
Unemployment
Health
Prevention
Protection
24
Promoting Shared Prosperity through
Better Earnings, Employment and
Job Quality
Reducing Risk of Slipping into Poverty
through Better Insurance against Effects of Shocks
Reducing Extreme Poverty
Now and for future generations
Labor Markets Pensions Safety Nets
Social Protection and Labor Systems
25
SP System with 3 Functions goes beyond SP programs
26
Promotion
Protection
Prevention
Insuring against
the Impact of
Risk • Health insurance
• Crop and weather
insurance
• Remittances
• Old age and
disability pensions
• Unemployment
and disability
insurance
Poverty alleviation • Charitable, family and
community transfers
• Conditional and
unconditional cash
transfers
• Public works
• In-kind transfers
Promotion of
opportunities • Education, health &
nutrition services
• Agricultural
extension
• Microfinance
• CCT
• Skills training
• Labor facilitation and
regulation reforms
Pregnancy, Early
childhood
School age
Youth Working
age
Old age
27
Virtues of systems: (i) multiple instruments can be mobilized to
manage a given risk; (ii) coordination of instruments across risks
(iii) ensure incentives compatibility (less confusion) across program
Promotion:
nutrition/ECD, CCTs for
pre-school, health
Protection: OVC
programs, child allowances
Promotion:
Employment
services,
entrepreneurship,
training and skills
Protection: Cash
and in-kind
transfers, public
works programs
Prevention:
Unemployment,
disability insurance
Promotion: CCTs
for (girls) education
Protection: Child
allowances, school
feeding
Promotion: Youth
employment
programs, skills
training
Protection: Social
pensions
Prevention: Old-age
pensions, disability
insurance
Examples of programs
Source: “Building Resilience and Opportunity”, World Bank Social
Protection strategy background work, available at
www.worldbank.org/spstrategy
Program
Program
Program
Program
Levels of a
SPL System
Administration level:
Aim: Building basic subsystems to support one or more programs for security, equity or opportunity
Admin. sub-
systems
Program level:
Aim: Improving design of existing programs and harmonizing across portfolio of programs
Policy Level:
Aim: Ensuring overall policy coherence across programs and levels of government
Portfolios of coherent programs that can communicate with each other, often share administrative sub-systems, and work together to deliver resilience, equity and opportunity
Systems: Better social protection
for the future
Goal: Building the “nuts and bolts” sub-systems to provide
one or more 3P functions
Low capacity contexts
Few or no functional formal 3P programs
Goal: Policy coordination to
ensure efficiency, equity and incentive
compatibility
Better capacity contexts
Well-functioning programs with aligned incentives and clear institutional roles
Goal: Improving efficiency and efficacy
of each program, improving coordination
across programs
Emerging capacity contexts
Existing systems often fragmented, with limited capacity to coordinate
29
Policy choices (i) How various programs will be designed both in terms of their mandate
and the choice of instruments?
Balance between 3Ps;
Rights vs discretion.
Harmonization, coordination or integration?
(ii) How they will be financed?
Affordability and sustainability.
From “given budget” to mandates.
Donor
(iii) What type of institutional arrangements will be used for implementation?
Roles, rules, controls. Agencies and ministries. Decentralization.
Role of beneficiaries: from “recipient” to “principal”
Common platforms (implementation mechanisms): registries, targeting, payments, outreach/intake staff, audits and control, evaluation.
30
Transition paths to more integrated SP
systems
31
Challenges in the move beyond
programs towards systems Ownership/identity. How to rally/mobilize support / attract
leaders to impersonal “system”.
Agility/flexibility. How to ensure rapid reaction when coordination has to involve many parties? How to avoid building large overly bureaucratized mega institutions?
Incentives for innovation. Sometimes it is easier to make/test changes in isolated programs.
Externalities can be negative: poorly performing scheme can draw resources from other parts;
Costs for beneficiaries: in terms of knowing complex landscape/choices and being able to make decisions;
Interaction with private/informal arrangements. Expanding coverage of increasingly complex public arrangements poses a challenge of crowding out private /informal networks.
32
What should we expect from more
integrated social protection systems? Expanded coverage of SP programs.
A good SP system identifies coverage gaps and works to ensure the inclusion of the most vulnerable in the SP system and to eliminate overlaps and redundancies
Greater equity A good SP system will ensure that fiscal resources are equitably distributed,
will achieve horizontal equity,
Sustainability By lowering administrative costs, garnering political support and directing
resources to most efficient uses.
Better labor market and human development outcomes. By minimizing distortions, providing incentives to beneficiaries to graduate,
workers to move to more productive employment and service providers to target services to most needy and to focus on results (rather that outputs)
Ability to respond to crisis/resilience. Less poverty.
33
Thank you
34
© Andrea Borgarello / World Bank