The 2015 Social Protection Indicator Results for Asia

Sri Wening HandayaniADB Principal Social Development Specialist

1

The views expressed in this presentation are those of the author and do not necessarily reflect the views of ADB or its Board ofGovernors or the governments they represent.

qIntroductionØ What is Social Protection Indicators?Ø Why and How SPI are constructed?

qThe SPI MethodologyØ The SPI formulationØ Data requirements

qResultsqQuestions and Recommendations

Outline of Presentation

Set of policies and programs to reduce poverty and vulnerability by:

§ Promoting efficient labor markets,§ Reducing people’s exposure to risks,§ enhancing their capacity to protect

themselves against hazards and interruption/income loss

3

ADB Definition of Social Protection =

Social Protection Programs Subprograms

Social Insurance

PensionsHealth InsuranceOther Social Insurance (passive labor market programs, e.g., unemployment insurance and disability insurance, maternity benefits; and provident funds)

Social Assistance

Social TransfersChild Welfare ProgramsHealth AssistanceAssistance to Older PeopleDisability Assistance

Active Labor Market ProgramsCash- or Food-for-Work Programs

Skills Development and Training (targeted at the unemployed and underemployed)

Source: ADB. 2012. The Revised Social Protection Index: Methodology and Handbook. Manila.

Components of Social Protection

SPI Defined

• SPI is a unitary indicator used to assess the effectiveness of SP programs

• The SPI can be disaggregated intoü By Componentü By size of benefits and by breadth of coverageü By poverty and gender

• The SPI can be used toü Monitor the extent of social protection activitiesü Evaluate the effectiveness of social protectionü Contribute in formulation of new policies and programs

The Evolution of SPI

SPI started in 2005 with a composite index of four indicators:

(1) SP Expenditures as share to GDP; (2) SP Coverage; (3) SP Distribution and (4) SP Impact

In 2009, was SPI became a combined indicator, which can be disaggregated to several dimensions

Ø Expenditures as ratio to GDP per capitaØ SP coverageØ SP benefitsØ Distributional impact (poverty and gender)

The Evolution of SPI

In 2012, revision to improve the SPI formula was introduced

§ The Change in denominator Ø in 2009 SPI the per capita SP expenditures were compared to

25% of GDP per capitaØ The 2012 SPI compilation used the GDP per capita

§ Indicator versus IndexØ The SPI was no longer constructed on the basis of indexing (e.g.,

from 0 to 100)Ø Instead, as one simple indicator expressed as % of GDP per

capita

The SPI Methodology

• The 2015 SPI draws on the methodology set out in the 2012 compilation

• The information required to compile the SPI are:(i) The basic statistics (economic, demographic and

social statistics)(ii) Data on actual expenditures and beneficiaries of

social protection• The programs included were only those implemented by

central governments

The SPI Formula

General Formula:

!Total SP Expenditures

Total Intended Beneficiaries "#$ %&"'(& )*+

Ø Disaggregating SPI by Categories

ü SPI = SPISI + SPISA + SPILMP

Where:SPISI, SA, LMP = Total SI expenditures/(total reference population x per

capita GDP)

The SPI Formula

Ø Disaggregating by SPI Depth of benefits and Breadth of coverage

ü SPI = SPI Depth x SPI Breadth

Depth

Breadth

Total SP ExpendituresTotal Intended Beneficiaries ÷ $%& '($)*( +,- =

× Total Actual BeneficiariesTotal Intended Beneficiaries

The SPI Formula

Ø Disaggregating SPI by Poverty

ü SPI = SPI poor + SPI Non-poor

ü SPI = SPI female + SPI male

Ø Disaggregating SPI by Gender

The 2015 Results – SP Expenditures as Share to GDP and as Share to GDP per Capita (SPI)

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0

MyanmarCambodia

BhutanLao PDR

BangladeshPakistan

IndonesiaNepal

PhilippinesSri Lanka

TajikistanThailandMalaysia

SingaporeMaldives

Viet NamGeorgia

ArmeniaAzerbaijan

China, People's Rep. ofKorea, Rep. of

MongoliaUzbekistan

Kyrgyz RepublicJapan

Overall SPI (Average = 4.0% of GDP per Capita)

Expenditures as share to GDP (average = 5.3%)

The 2015 Results – SP Expenditures as Share to GDP and as Share to GDP per Capita (SPI) by Income Group and by Region

11.6

6.03.9

11.5

6.8

3.0 2.7

7.9

5.2

2.8

6.4

5.6

2.6 2.5

0.0

5.0

10.0

15.0

20.0

25.0H

igh

-In

com

e

Up

pe

r-M

idd

le-I

nco

me

Low

er-

Mid

dle

-In

com

e

Eas

t A

sia

Ce

ntr

al a

nd

We

st A

sia

So

uth

ea

st A

sia

So

uth

Asi

a

By Income Group By Region

Share of SP Expenditures to GDP (Average = 5.3%)

SPI (Average = 4.0%)

The 2015 Results – The SPI by Program and by Country

0.0 5.0 10.0 15.0 20.0 25.0

Myanmar

Lao PDR

Bhutan

Cambodia

Bangladesh

Pakistan

Indonesia

Nepal

Philippines

Sri Lanka

Tajikistan

Thailand

Malaysia

Singapore

Maldives

Viet Nam

Georgia

Armenia

Azerbaijan

China, People's Rep. of

Korea, Rep. of

Mongolia

Uzbekistan

Kyrgyz Republic

Japan

% to GDP per Capita

Social Insurance (Average = 3.1%)

Social Assistance (Average = 0.8%)

Labor Market Programs (Average = 0.05%)

The 2015 Results – The SPI by Program, by Income Group and by Region

6.6

3.9

2.2

5.54.2

2.0 1.6

1.1

1.3

0.6

0.9

1.3

0.50.8

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0H

igh-

Inco

me

Upp

er-M

iddl

e-In

com

e

Low

er-M

iddl

e-In

com

e

East

Asi

a

Cent

ral a

nd W

est A

sia

Sout

heas

t Asi

a

Sout

h As

ia

By Income Group By Region

% to

GDP

per

Cap

ita

Social Insurance (Average = 3.0%)Social Assistance (Average = 0.8%)Labor Market Program (Average = 0.05%)

The 2015 Results – The Coverage of Social Protection

0.0 20.0 40.0 60.0 80.0 100.0 120.0

MyanmarBhutan

MalaysiaTajikistan

BangladeshNepal

PakistanUzbekistan

Lao PDRArmenia

AzerbaijanGeorgia

CambodiaKyrgyz Republic

Sri LankaMaldives

JapanChina, People's Rep. of

Viet NamIndonesia

ThailandMongolia

Korea, Rep. ofSingapore

Philippines

% to Intended Beneficiaries

Social Insurance (Average = 35.2%)

Social Assistance (Average = 18.4%)

Labor Market Programs (Average 1.5%)

The 2015 Results – The Size of Social Protection Benefits

-10.0 10.0 30.0 50.0 70.0 90.0 110.0

CambodiaPhilippines

ThailandLao PDR

IndonesiaMongoliaMaldives

MyanmarKorea, Rep. of

Viet NamChina, People's Rep. of

SingaporeKyrgyz Republic

JapanGeorgia

ArmeniaAzerbaijan

Sri LankaTajikistan

PakistanBhutan

NepalMalaysia

Uzbekistan

% to GDP per Capita

Social Insurance (Average = 21.4%)Social Assistance (Average = 5.7%)Labor Market Programs (Average = 5.4%)

The 2015 Results – The Distributional Dimension of SPI

0.00 5.00 10.00 15.00

Myanmar

CambodiaBhutan

Lao PDRBangladesh

PakistanNepal

Indonesia

ThailandPhilippinesTajikistan

Sri Lanka

MongoliaViet NamMalaysia

China, People's Rep. ofKorea, Rep. of

Kyrgyz RepublicArmenia

MaldivesGeorgia

Singapore

AzerbaijanUzbekistan

Japan

% to GDP per Capita

Poverty

Poor (Average = 1.0%)

Nonpoor (Average = 3.0%)

- 5.0 10.0 15.0

Myanmar

CambodiaBhutan

Lao People's…Bangladesh

PakistanNepal

Indonesia

ThailandPhilippinesTajikistan

Sri Lanka

MongoliaViet NamMalaysia

China, People's Rep. of

Korea, Rep. ofArmenia

Kyrgyz Republic

MaldivesGeorgia

SingaporeAzerbaijan

UzbekistanJapan

% to GDP per Capita

Gender

Women (Average = 1.9%)

Men (Average = 2.1%)

Trends in Social Protection: Expenditures as % to GDP and % to GDP per Capita

Expenditures as share to GDP

Expenditures as share to GDP per capita

1.0

2.0

3.0

4.0

5.0

6.0

2009 2012 2015

In P

erce

nt

Trends in Social Protection by SP Program

Overall SPI

Social Insurance

Social Assistance

Labor Market Programs

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2009 2012 2015

% to

GD

P pe

r Cap

ita

Trends in Social Protection: Distributional Dimension

Poor

Nonpoor

FemaleMale

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2009 2012 2015

% to

GDP

per

Cap

ita

Conclusions▪ Social insurance spending prevails over other programs;

▪ Health insurance lags behind pensions;

▪ Many countries have achieved progress in extending social insurance;

▪ The expenditures on social assistance was especially high in countries with broad-based entitlements;

▪ Social Assistance, cash transfers and social pensions coverage are expanding in many countries;

▪ Active labor market program remain underfunded across the whole of Asia; and

▪ A key policy goal is to balance coverage and benefits levels.

QUESTIONS?

Contact Information:

Thank you…

24