Framing: Social Protection and Jobs

October 28, 2019

Margaret GroshSenior Advisor

World Bank

Outline

1. Why do we have SPJ?2. SPJ in practice3. World Bank and SPJ

2

WHY DO WE HAVE SPJ?

3

S P J c o n t r i b u t e s t o m a n y d e e p s o c i e t a l g o a l s

4

SPJ is Part of the Formula for Reducing Poverty and Inequality

5

• Strong growth and good macroeconomic management

• Labor markets that work to translate growth into increasing job opportunities for the less well-off, reducing income gaps

• Policies that raise productivity of the poor: • Invest in children (ECD and quality education)• Invest in skills through the life cycle• Invest in infrastructure (rural roads,

electrification)

• Social programs to protect the poor and vulnerable: targeted cash transfers; social insurance.

• Progressive taxation to pay for all of this

WHAT WORKS:

Source: Taking on Inequality (World Bank, Joint EFI POV–DEC Flagship 2016).

Poverty is declining rapidly,inequality declining globally,

increasing in half of countries

6

Number and Share of people living below USD1.90/day, 1990-2013

Source: Taking on Inequality (World Bank, Joint EFI POV–DEC Flagship 2016), based on 2013 data from PovCalnet.

But to end extreme poverty by 2030 we need to reduce income inequality at a faster pace

7

Simulations of poverty by 2030 under current global growth but different inequality scenarios indicate that reaching the 3% goal is only possible by boosting shared prosperity and reducing inequality…

Source: Taking on Inequality (World Bank, Joint EFI POV–DEC Flagship 2016), based on 2013 data from PovCalnet.

Poverty simulations (2030) under different inequality scenarios (shared prosperity

premium)

8

Children’s low human capital will impair their productivity and earnings

9

Human capital is low and lowest among the poorer

Disaggreation of World Bank Human Capital Index by Quintile

10

Social Protection Contributes to Human Development and Opportunity

11

Social Protection Contributes to Human Development and Opportunity

Increase uptake of health

services for pregnant women

Reduce infant mortality

Increase vaccination and growth monitoringImprove child

health, nutrition, and development

Reduce child labor

Increase school enrollment and

attendanceEmpower women

Increase life satisfaction and reduce

stress

Help to build skills for work

and life

Reduce teenager

pregnancy

Enhance female labor

force participation

Improve health for

elderly

12

SPJ has several touchpoints with climate change

Just Transition for Powering Past Coal

Changing livelihoods more broadly, especially in agriculture

Compensation in Energy Subsidy Reform

Maybe Redistributing Revenues from Carbon Taxes

Addressing challenges of 100 million people pushed into poverty, 150 million climate migrants

Increasing natural disasters

Coping with disaster requires more Adaptive SP systems

13

0

100

200

300

400

500

600

700

0

100

200

300

400

500

600

Num

ber o

f peo

ple

affe

cted

(mill

ions

)

Num

ber o

f disa

ster

s occ

urin

g

Occurrence Total affected

NUMBER OF DISASTERS OCCURRING AND PEOPLE AFFECTED, 1980-2016

Source: EM-DAT

INVESTING IN A MORE ADAPTIVE SOCIAL PROTECTION SYSTEM

Three building blocks

ADAPTIVEPROGRAMSADAPTIVE

INFORMATION

ADAPTIVE FINANCE

Adaptive SPJ systems help countries and governments become resilient

FORCED DISPLACEMENT

NATURAL DISASTERS

ECONOMIC AND FINANCIAL

PANDEMICS CONFLICT

Common and increasing shocks 14

SPJ systems must respond to changes in the world of work

This Photo by Unknown Author is licensed under CC BY

This Photo

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…and to perennial challenges in the world of work

This Photo by Unknown Author is licensed under CC BY

16

This Photo by Unknown Author is licensed under CC BY-NC-ND

The picture can't be displayed.

This Photo by Unknown Author is licensed under CC BY

informality

low productivity

Instability of income

youth inactivity

WHAT IS SPJ IN PRACTICE?

17

SOCIAL SAFETY

NETS

LABOR AND JOBS

SOCIAL INSURANCE

CASH TRANSFERS

PUBLIC WORKS

SCHOOL FEEDING

PRODUCTIVE INCLUSION

SKILLS BUILDING

JOB SEARCH

HEALTH INSURANCE

PENSIONS

UNEMPLOYMENT

INSURANCE

SOCIAL SERVICES

DELIVERY SYSTEMS

Resilience

EquityOpportunity OLD AGE CARE

CHILD CARE

ETC

SOCIAL REGISTRIES

ID

PAYMENTS MECHANISM

S

CLIENTSPROGRAMS/ SYSTEMS

World Bank definition “Social protection and labor systems, policies, and programs help individuals and societies manage risk and volatility and protect them from poverty and destitution—through instruments

that improve…..

Universal Social Protection for all in NeedTo build opportunity, equity and resilience

Individual programs and systems

have several desirable attributes:… appropriate, inclusive, adequate, equitable, cost-effective, sustainable, incentive-compatible, dynamic…(some of which are in tension with each other)

19

SPJ systems must respond to many different contexts, different needs

Different notions of poverty And needs of different groups

20

Core social protection domains interact

Labor and Jobs

Social Insurance

Social Assistance

Individual interventions can affect opportunity, equity, resilience

Weakness in one dimension demands strength in others

21

Given the diverse needs,countries offer a myriad of social benefits & services

22

Cash Transfers (CCTs or UCTs) In-Work Benefits

Social Pensions

UnemploymentBenefits

Birth, Child Allowances

Scholarships

Disability Benefits

Food Stamps

Nutrition Supplements

MaternityBenefits

Survivor & Death

Benefits

Sickness & InjuryBenefits

School Feeding, Supplies, Transport

Contributory Pensions

Emergency Assistance

Care-GiverAllowance

Wage Subsidies

Housing & Utility

Subsidies

Family Services

ALMP / Activation Services

Parenting Services

ECD & Nutrition

Child Care Services

Services for At-Risk Youth

Child Protective Services Social & Long-Term Care Services

ActiveAging

Services

Training & Skills

Emergency Services

Legal services

Intermediation, Referral, Counseling, Psycho-Social Support Services

Health Benefits

Disability Services

Public Works

Financial & Productive

Inclusion Services

Transport Subsidies

Social Pensions

A “typical” social protection landscape….

Civil Servants

SOEs

Private Sector pensions

Security Forces

Social Pensions

Fuel subsidiesFood subsidies

Social Insurance

Social Assistance

LOW INCOME BENEFICIARIES HIGH INCOME

GEN

ERO

SITY

GEN

ERO

SITY

Public works

Universal child benefits

Cash transfers

LOW INCOME BENEFICIARIES HIGH INCOME

Subsidized health insurance

Formal labor marketprotections

Productive inclusion

PES

23

Labor

Greater spending on social insurancethan social assistance

0

1

2

3

4

5

6

7

8

9

LIC (18) LMIC (39) UMIC (34) HIC (11)

Spen

ding

, % o

f GDP

Income group

Average SI spending, % of GDP Average SSN spending, % of GDP

Spending on social assistance and social insurance as share of GDP

24ASPIRE 2018

Significant country variations are hidden behind the averages

Share of GDP spent on Social Assistance

25State of Safety Nets 2018

Resources are scarce and unstable, especially in low income countries

26

Beegle, Couduel, and Monsalve 2018

Resources too few to cover all of poor

And often from donors, not govt

Social protection often small compared to health and education spending

27CEQ; Lustig 2017

Spending on Energy Subsidies Is Often Greater Than Spending on Social Assistance

28

Evidence for Africa

Beegle, Coudouel, and Monsalve 2018

Tax and transfer systems in client countries have limited impact on inequality

29Draft WDR, 2018

And often are too small to conquer poverty either

30CEQ; Lustig 2017

31

IMF Fiscal Monitor October 2017

There is more redistribution in advanced economies, but it mostly comes from transfers, not taxes

The distributional take away on pensions depends in part on whether you think of them as

deferred wages or as transfers

32

CEQ; Lustig 2017

Globally, incidence is progressive for all social assistance instruments

33State of Safety Nets 2018

Coverage is inadequate, especially in low income countries

Coverage of Social Protection and Labor Programs, Poorest Quintile, programs in household surveys

34ASPIRE 2018

…and benefits can be low

LEVELS OF ASSISTANCE TO THOSE IN NEED

Source: ASPIRE

Bangladesh:26 SSN programs41 SPJ programs0.73% of GDP on

SSN161 mn

population$1359 GDP/cap

LIC

Brazil:24 SSN programs71 SPJ programs1.35% of GDP on

SSN206 mn

population$8650 GDP/cap

MIC

Chile:80 SSN programs179 SPJ programs3.49% of GDP on

SSN 18 mn population$13,793 GDP/cap

U-MIC

Philippines:16 SSN programs40 SPJ programs0.67% of GDP on

SSN102 mn

population$2952 GDP/cap

MIC

SPJ systems are complex

36ASPIRE 2018

Georgia: shared social registry, calibrated thresholds

Chile: coordinating contributory and non-contributory pensions

37

Non-contributoryTargeted benefit

Income-replacement pension (no minimum)

Retirementincome

Earnings when working

But should fit together in sensible ways

Delivery Systems: the conduit from funding to client

Citizen InterfaceInformationSystems

Institutions & Governance

38

A recurrent challenge is dynamism in who is served

Program entry can look like this: When it should look like this:

39

SPJ IN THE WORLD BANK

40

WDR 1980 WDR 1990 WDR 2000 WDR 2006 WDR 2013

SRM1.0 & SP Strategy 2000/1 SPL Strategy 2012

WDR 2009WDR 1995

Gradual articulations of SPJ

WDR 2018

THE WORLD BANK’S SOCIAL PROTECTION AND LABOR STRATEGY

2012-2022Inclusion

Productivity

Responsivity

Coordination

World Bank SP Engagements: numbers

• Lending in 69 countries • Analytic work in 82

countries• From:

Afghanistan to Zimbabwe, Saint Martin to China, fragile states to EU

• From a practice dominated by IBRD to one majority IDA and with engagement in most fragile states

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0

1000

2000

3000

4000

5000

6000

7000

IDA IBRD

F Y 9 1 - F Y 1 8 S P L l e n d i n gU S $ m i l l i o n s

World Bank SP engagements: content

parametric pension reform, systemic pension reform, informal sector pensions

Jobs Diagnostics, labor market reforms, youth employment, training, public employment services, migration support services

Cash transfers, public works, social pensions, disability benefits, school feeding, food programs, fee waivers for housing or energy, etc.

MT, HMT, PMTs, CBT, geographic,demo, mixed methods

ID, social registries, information systems, payment mechanisms, citizen interface

Social intermediation, social care services

RCTs, PSM, RDD, process evaluations, qualitative assessments44

C o n t i n u i n g v i b r a n t d i s c u s s i o n s

• Framing: Human Rights – Human Capital

• Universalism: Of what? of promise of protection when needed? Or a payout? How to get there?

• Consensus building: role and shape of SP in fiscal space and social contract, new emphasis on tax side

• SP’s place: the humanitarian – development nexus

• Jobs Externalities: how big? how to handle?

45

Joining in Ongoing Vibrant Debates in the Sector

This Photo by Unknown Author is licensed under CC BY-NC-ND

Universal Social Protection Systems

Resilience for the vulnerable

Equityfor the poor

Opportunity for all

Insuring against impacts of different

shocks

Protecting against dire poverty and loss of

human capital

Promoting human capital and access to productive

work

For more information:http://www.worldbank.org/en/topic/socialprotectionlabor