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REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument for justice and peace

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Page 1: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

REFORMING SOCIALPROTECTION SYSTEM AND

BASIC INCOME

ANDRAS UTHOFF13th International Conference of the Basic Income

Earth NetworkBasic Income as an instrument for justice and peace

Page 2: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

CONTENT

• ADDRESSING INEQUALITY: IN SEARCH OF A NEW PARADIGM FOR SOCIAL PROTECTION

• IMPROVING FINANCING: THE INCREASING IMPORTANCE OF THE FISCAL SPACE

• ACKNOWLEDING RIGHTS: SOCIAL DIALOGUE, GRADUALISM AND SOLIDARITY

• CONCLUSIONS

Page 3: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

TWO PARADIGMS…

Two paradigms that have marked the history of social protection:

1. Old assistance for the neediest (non contributive financing of low magnitude)

2. Social security for formal workers (contributive financing with universal coverage expectations)

Page 4: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

… THAT HAVE LIMITED ACCESS AND GOALS

• NON CONTRIBUTIVE COVERAGE (PUBLIC FINANCE)– LOW TAX BASE– LOW TAX BURDEN– HIGH LEVEL OF EVASION AND ELUSION– REGRESIVE STRUCTURE (LARGELY VALUE ADDED TAXES)

• CONTRIBUTIVE COVERAGE (LABOR CONTRACTS)– ROLE INCOMPATIBILITY– LOW EMPLOYMENT GENERATION– HIGH LEVELS OF UNDEREMPLOYMENT – INFORMALITY AND UNEMPLOYMENT– PRECARIOUS FORMAL JOB CREATION

These problems are systemic and have worsen during the crisis These problems are similar across countries but involve ad hoc strategies on the

basis of historical, cultural and institutional developments

Page 5: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

LIMITING CONTRIBUTIVE COVERAGE.

AMÉRICA LATINA (16 PAÍSES): OCUPADOS a AFILIADOS A LA SEGURIDAD SOCIAL, ALREDEDOR DE 2006

43.9

23.9

68.4

19.6

51.3

16.3 15.4

25.5

1 2 3 4 5 6 7 8

Cobertura promedio: 37,3%

Urbano Rural Urbano formal Urbano informal Quintil 5 Quintil 1 Hombres Mujeres

Afiliados a la seguridad social como porcentaje de la población en edad

de trabajar:

Fuente: Comisión Económica para América Latina y el Caribe (CEPAL), sobre la base de encuestas de hogares de los respectivos países.

a Trabajadores ocupados de 15 años y más que declararon ingresos laborales. En el caso de Argentina y República Bolivariana de Venezuela, asalariados. Promedio simple.

Page 6: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

A NEW PARADIGM…

• New social protection paradigm

• Moving from a labor based society to a rights based society

• integrating sources of financing to accomplish the normative horizon of social protection

Page 7: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

…. THAT FACES SEVERE CHALLENGES Informality

Low contributive coverage Limits social cohesión and equity.

Low tax collection Insufficient fiscal resources Limited non contributive programs

Segmented society Those with stable formal jobs Those with precarious unstable and informal job Those with incompatibilities to join the labor

market

Page 8: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

… AND IMPLIES A CAREFULL DESIGN OF FINANCING

Financing design is crucial and depends on policy aims:

Pensions: Consumptions smoothing => contributive Poverty relief => non contributive.

Health: Risk pooling => solidarity: integrating

financing schemes Basic income:

Transfers to poor households => non contributive

Page 9: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

THE FISCAL SPACE FOR SOCIAL PROTECTION AND BASIC INCOME

FISCAL SPACE

EFICIENCY SOCIAL JUSTICE

MACRO MICRO LIVING STANDARDS DISTRIBUTION

PORCENTAGE OF GDP ALLOCATED TO SOCIAL PROTECTION

Page 10: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

AMÉRICA LATINA (21 PAÍSES): GASTO PÚBLICO SOCIAL, COMO PORCENTAJE DEL PIB, 1990-1991 A 2004-2005

Fuente: CEPAL, sobre la base información proveniente de la base de datos sobre gasto social de la Comisión.

….. SHARE OF GDP ON SOCIAL SPENDING IS STILL VERY LOW

Promedio regional 1990-1991: 12,8%

Promedio regional2004-2005: 15,9%2002-2003: 15,8%2000-2001: 15,7%

Bra

sil

Arg

ent

ina

Bo

livia

Co

sta

Ric

a

El S

alv

ad

or

Pe

Ve

ne

zu

ela

Nic

ara

gu

a

Pa

ragu

ay

xic

o

Cu

ba

Uru

gu

ay

Co

lom

bia

Ch

ile

Ho

nd

ura

s

Pa

na

T.y

Ta

ba

go

Ja

mai

ca

R.D

om

inic

an

a

Gu

ate

ma

la

Ec

ua

do

r

SPNF SP GG GCP GC

0

5

10

15

20

25

30

35

40

45

1990-1991 2000-2001 2006-2007 2008

Promedio simple (21 países)1990-1991 : 9.6%

Promedio simple regional2008 (12 países) : 16.2%2006-2007 (21 países) : 13.7 %2000-2001 (21 países) : 12.5%

Page 11: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

… AND FINANCED UNDER A NON OPTIMAL STRUCTURE OF TAXATION

• LOW (BASES AND BURDENS)• REGRESIVE• SUBJET TO EVASION AND ELUSION• LARGELY DEPENDENT ON VALUE ADDED

Page 12: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

LOW LEVELS OF TAXATION (% GDP, 2004)

0%

5%

10%

15%

20%

25%

30%

35%

40%

Arg

en

tin

a

Bo

livia

Bra

sil

Ch

ile

Co

lom

bia

Co

sta

Ric

a

Ec

ua

do

r

El S

alv

ad

or

Gu

ate

ma

la

Ha

ití

Ho

nd

ura

s

xic

o

Nic

ara

gu

a

Pa

na

Pa

rag

ua

y

Pe

Re

p.

Do

min

ica

na

Uru

gu

ay

Ve

ne

zue

la(R

B)

Ingresos tributarios Contribuciones seguridad social

Otros ingresos Ingresos de capital

Ing. Trib.+SS: 17.5%Total: 20.8%

Page 13: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

AMÉRICA LATINA Y EL CARIBE (21 PAÍSES): VARIACIÓN ANUAL DEL GASTO SOCIAL TOTAL Y EL PRODUCTO INTERNO BRUTOa

(En porcentajes)

Fuente: CEPAL, sobre la base de información proveniente de la base de datos sobre gasto social de la Comisión y de cuentas nacionales.a Promedio ponderado de los países.

… USED IN A PROCYCLICAL WAY

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

-10

-5

0

5

10

15

20

25

Variación PIB en millones US$2000 Variación GASTO PUBLICO SOCIAL en millones US$2000

Page 14: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

… CONTINGENT LIABILITIES INCREASE AS DEMOGRAPHIC DIVIDEND ENDS

Cociente de sustentabilidad

40.0

50.0

60.0

70.0

80.0

90.0

100.0

110.0

Dependencia demográfica

Brasil Chile Costa Rica MéxicoUruguay

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0.40

0.45

0.50

0.55

0.60

0.65

0.70

0.75

0.80

MEXICO BRASIL CHILECOSTA RICA URUGUAY

Page 15: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

Regla de saldo

PaísFecha de

implementaciónCobertura Tipo Reglas Adicionales Estatuto

Argentina 2004 Federal y subnacional

Crecimiento nominal del gasto primario no podrá superar la tasa de aumento nominal del PIB

  Legal

Brasil 2001 Federal y Subnacional

Equilibrio corriente (subnacional); superávit primario (federal)

ímites de gasto salarial (porcentaje del total )

Legal

Chile 2000 Central Superávit global estructural (1% del PIB)

Fondo de Compensación del Cobre (FCC); Fondo de Estabilización Económica y Social (FEES)

Política

Colombia 2001 Gobiernos Subnacionales

Equilibrio corriente Fondo Nacional del Café (FNC); Fondo de Ahorro y Estabilización Petrolera (FAEP)

Legal

Ecuador 2005 Central y subnacional

Crecimiento real del gastocorriente no podrá superarel 3,5%

Fondo de Estabilización Petrolera (FEP); Fondo de Ahorro y Contingencias (FAC)

Legal

México 1917 Gobiernos Subnacionales

Equilibrio corriente Fondo de Estabilización de los Ingresos Petroleros (FEIP)

Legal

Perú 2003 Nacional Déficit inferior a 1% del PIB; crecimiento real del gasto primario no superior a 3% por año

Fondo de Estabilización Fiscal Legal

Venezuela 2000 Nacional Equilibrio Corriente Fondo de Estabilización Macroeconómica (FEM)

Legal

Regla de deuda

Argentina 2004 Gobiernos Subnacionales

Límites anuales de endeuda-miento, de manera tal que los servicios no superen el 15% de los recursos corrientes

  Legal

Brasil 2001 Gobiernos Subnacionales

Límites anuales de endeudamiento

  Legal

Colombia 1997 Gobiernos Subnacionales

Límite al endeudamiento, de acuerdo con indicadores de solvencia y liquidez

  Legal

Ecuador 2005 Central y subnacional

Cronograma de reducciónde deuda, hasta alcanzar40% del PIB

Límites al endeudamientode gobiernos subnacionales(acervo, flujo y garantías)

Legal

Page 16: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

THE FISCAL SPACE FOR SOCIAL PROTECTION AND BASIC INCOME

FISCAL SPACE

EFICIENCY SOCIAL JUSTICE

MACRO MICRO LIVING STANDARDS DISTRIBUTION

PORCENTAGE OF GDP ALLOCATED TO SOCIAL PROTECTION

Page 17: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

THE FISCAL SPACE FOR SOCIAL PROTECTION AND BASIC INCOME

FISCAL SPACE

EFICIENCY SOCIAL JUSTICE

MACRO MICRO LIVING STANDARDS DISTRIBUTION

PORCENTAGE OF GDP ALLOCATED TO SOCIAL PROTECTION

EFFICIENT ALLOCATION

Page 18: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

SOCIAL SECURITY AND ASSISTANCE: INCREASING PRIORITIES

AMÉRICA LATINA Y EL CARIBE (21 PAÍSES): EVOLUCIÓN DEL GASTO PÚBLICO SOCIAL, COMO PORCENTAJE DEL PIB, SEGÚN SECTORES, 1990-1991 A 2004-2005a

Fuente: CEPAL, sobre la base de información proveniente de la base de datos sobre gasto social de la Comisión.a Promedio ponderado de los países, excluida Nicaragua.b La información disponible no permite separar ambas partidas de gasto. Según antecedentes de estudios nacionales, la seguridad social representaría alrededor de 78% del monto de recursos aquí consignados.

b

Gasto social total Gasto en educación Gasto en salud Gasto en seguridad y asistencia social

Gasto en vivienda y otros

0

2

4

6

8

10

12

14

16

18

20

12.2

3.2 2.9

4.8

1.2

17.3

4.63.6

7.4

1.7

5.1

1.4

0.64

2.6

0.5

Page 19: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

BUT LARGE WELFARE STATE GAPS

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

0

1

2

3

4

5

6

7

8

9

10

11

12

arg 2006

Bol 2006

Bra 2006Chi 2006

Cri 2006

Ecu 2006Els 2006

Gtn2006Hnd 2006

Mex 2006

Nic 2006

Pan 2006

Pry 2006Per 2006

Rdo 2006

Ury 2006

Ven 2006arg 2002

Bol 2002

Bra 2002

Chi 2002

Cri 2002

Els 2002

Gtm 2002

Hnd 2002

Mex 2002

Nic 2002

Pan 2002

Pry 2002

Per 2002

Rdo 2002

Ury 2002

Ven 2002

NÚMERO DE DEPENDIENTES POR TRABAJADOR FORMAL

Pib p/cUS$2000

D/F

re

al

HIGH GAP

MEDIUM GAP

LOW GAP

Page 20: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

WITH DIVERSE NEEDS AND LIMITED ACCESS DOORS

GRUPO I GRUPO II GRUPO III

DEPENDIENTES/ POR TRABAJADOR FORMAL1. Menores2. Inactivos 3. Desempleados4. Informales5. Adultos mayores

PIB pcGS pcGS (%PIB)

INFORMALIDADASALARIADOS pobresDESEMPLEO

COBERTURA (cotizantes/ocupados)6. Total7. Formales8. Informales9. Asalariados

7.2940.619.8 3.027.1 9.5

1766 137 9,2

67.337.56.1

20.853.5 4.037.7

4.3937.723,43.8

23.811.3

5710 508 10.0

52.617.5 7.1

44.675.310.661.0

3.2837.821.8 5.020.217.6

6047 994 17.9

41.111.6 8.6

57.678.927.371.2

Grupo I. Bolivia, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Paraguay Perú, República DominicanaGrupo II, México, Panamá, VenezuelaGrupo III. Argentina, Brasil. Chile, Costa Rica, Uruguay

Capacidad de entrada no contributiva

Capacidad de entrada contributiva

Page 21: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

THE FISCAL SPACE FOR SOCIAL PROTECTION AND BASIC INCOME

FISCAL SPACE

EFICIENCY SOCIAL JUSTICE

MACRO MICRO LIVING STANDARDS DISTRIBUTION

PORCENTAGE OF GDP ALLOCATED TO SOCIAL PROTECTION

EFFICIENT ALLOCATION

Page 22: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

THE FISCAL SPACE FOR SOCIAL PROTECTION AND BASIC INCOME

FISCAL SPACE

EFICIENCY SOCIAL JUSTICE

MACRO MICRO LIVING STANDARDS DISTRIBUTION

PORCENTAGE OF GDP ALLOCATED TO SOCIAL PROTECTION

EFFICIENT ALLOCATION

FAMILY MARKETSTATE

Page 23: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

FINANCIAL CRISIS HAVE RETARDED POVERTY ALLEVIATION

Fuente: Comisión Económica para América Latina y el Caribe (CEPAL), estimaciones y proyecciones a partir de las encuestas de hogares y cifras oficiales de los países.a/ Proyecciones.

200119972002

20002004

2005

20062007 a/

1994

1990

1986

1980

34,0

35,0

36,0

37,0

38,0

39,0

40,0

41,0

42,0

43,0

44,0

45,0

46,0

47,0

48,0

49,0

50,0

3200 3400 3600 3800 4000 4200 4400

PIB per cápita (en dólares de 2000)

Po

rce

nta

je d

e p

ob

laci

ón

po

bre

Page 24: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

BASED ON THREE MECHANISMS

• FAMILY INCOME– AFFECTED BY THREE DETERMINANTS

• PRODUCTIVITY OF THEIR EMPLOYED MEMBERS • EMPLOYABILITY OF ITS ACTIVE MEMBERS• ELEGIBILITY FOR TRANSFERS OF ITS MEMBERS

Page 25: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

I II III IV V VI VII VIII IX

Var

iaci

ón

in

gre

so p

er c

ápit

a (e

n m

últip

los

de la

líne

a de

pob

reza

)

0

1

2

3

4

5

Ing

reso

per

cáp

ita

(en

múl

tiplo

s de

la lí

nea

de p

obre

za)

Línea de pobreza

Deciles de ingreso

Población pobre (1990)

Distribución del ingreso per cápita por deciles 1990

Variación del ingreso per cápita por cambios en el ingreso laboral por ocupado (1990-2003/05)Variación del ingreso per cápita por cambios en la tasa global de ocupación (1990-2003/05)Variación del ingreso per cápita por cambios en el ingreso no laboral per cápita (1990-2003/05)Ingreso per cápita 1990Ingreso per cápita 2003/05

Población pobre (2003/05)

Distribución del ingreso per cápita por deciles 2003/05

ALL THREE SHOULD BE OPERATIVE

Page 26: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

I II III IV V VI VII VIII

Var

iaci

ón

in

gre

so p

er c

ápit

a (e

n m

últip

los

de la

líne

a de

pob

reza

)

1

2

3

Ing

reso

per

cáp

ita

(en

múl

tiplo

s de

la lí

nea

de p

obre

za)

Variación del ingreso per cápita por cambios en el ingreso laboral por ocupado (1989/90-2004/05)

Variación del ingreso per cápita por cambios en la tasa global de ocupación (1989/90-2004/05)

Variación del ingreso per cápita por cambios en el ingreso no laboral per cápita (1989/90-2004/05)

Ingreso per cápita 1989/90

Ingreso per cápita 2004/05

Línea de pobreza

Distribución del ingreso per cápita por deciles 1989/90

IX

Deciles de ingreso

Población pobre (2004/05)

Distribución del ingreso per cápita por deciles 2004/05

Población pobre (1989/90)

ALL THREE SHOULD BE OPERATIVE

Page 27: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

THE FISCAL SPACE FOR SOCIAL PROTECTION AND BASIC INCOME

FISCAL SPACE

EFICIENCY SOCIAL JUSTICE

MACRO MICRO LIVING STANDARDS DISTRIBUTION

PORCENTAGE OF GDP ALLOCATED TO SOCIAL PROTECTION

EFFICIENT ALLOCATION

FAMILY MARKETSTATE

Page 28: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

THE FISCAL SPACE FOR SOCIAL PROTECTION AND BASIC INCOME

FISCAL SPACE

EFICIENCY SOCIAL JUSTICE

MACRO MICRO LIVING STANDARDS DISTRIBUTION

PORCENTAGE OF GDP ALLOCATED TO SOCIAL PROTECTION

EFFICIENT ALLOCATION

FAMILY MARKETSTATE

LARGE BENEFITSDEFINED BENEFITSPROGRESSIVE FINANCING

Page 29: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

ALTERNATIVE OPTIONS FOR SOCIAL PROTECTION AND BASIC INCOME

• FINANCING

• BENEFITS

• FINANCING MANAGEMENT

• ADMINISTRATION

• PARTICIPATION

• CONTRIBUTIVE OR NOT

• DEFINED CONTRIBUTIONS OR BENEFITS

• PAYG OR FUNDED

• PUBLIC OR PRIVATE

• MANDATORY OR VOLUNTARY

MULTIPLE COMBINATIONS TO IMPLEMENT SCHEMES BASED ON ACQUIRED RIGHTS OR CITIZENS RIGHTS

Page 30: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

CONTRIBUTIVE ACQUIRED RIGHTS TEND TO REPRODUCE INEQUALITY

AMÉRICA LATINA (18 PAÍSES): ESTRUCTURA DE LOS GASTOS, SEGÚN QUINTILES DE LA DISTRIBUCIÓN DEL INGRESO PRIMARIO, 1997-2004a

(En porcentajes)

Fuente: CEPAL, sobre la base de estudios nacionales.

a Promedio ponderado por la significación del gasto en el ingreso primario de cada país.

(Gasto social total = 100)

7.4 6.5 6.3 5.9 5.8

5.14.7 4.2 4.0 3.7

2.02.8 4.3 6.3

16.5

0.8 0.91.1

1.4

0.9

3.32.1 1.6

1.3

1.1

0%

5%

10%

15%

20%

25%

30%

Quintil I Quintil II Quintil III Quintil IV Quintil V

Educación Salud Seguridad social Vivienda Asistencia social

Page 31: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

… AND INEQUALITY IS HARDLY CHANGED

AMÉRICA LATINA (18 PAÍSES): EFECTO REDISTRIBUTIVO DEL GASTO PÚBLICO SOCIAL EN EL INGRESO, SEGÚN QUINTILES DE INGRESO PRIMARIO, 1997-2004a

(En porcentajes)

Fuente: CEPAL, sobre la base de estudios nacionales.

a/ Promedio ponderado por la significación del gasto en el ingreso primario de cada país.

(Ingreso total del Quintil V = 100)

49%70%

78%84%

91%

51%

30%

22%

16%

9%

0

10

20

30

40

50

60

70

80

90

100

Quintil I Quintil II Quintil III Quintil IV Quintil V

Po

rce

nta

jes Gasto social

Ingreso primario

Page 32: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

BOTH FINANCING SCHEMES SHOULD ALLIGN THEIR INCENTIVES

APV

PMG

PASIS

PILARCONTRIBUTIVO

PILARVO LU N TAR IO

PILARC O N TR IBU TIVO

PILARSO LID AR IO

Page 33: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

SOCIAL DIALOGUE, GRADUALISM AND SOLIDARITY

Technical componentes and Political

Macro stability

Minimun guaranteesTax burden and structureGovernability an productivity of public manages programsStabilization Funds and Contingent LiabilitiesCounter cyclical policies

Role of education

What level should be niversalClosing gaps

rural-urban socio-economicElite - públic

Pre-schooling for the poorLearnin to learnSchool insurance.

Employment

Address structural heterogeneityPro-employment investmentHuman resources policiesReduce discriminationLabor relation adapted to innvoation and economic cycle requirementsRe-trainingUnemployment insurance

Efficient, universal Social Security

Publico-private mixesIntegrate financing sources to incorporate solidaridaty without affecting insurance and savingsRiska rating mechanisms Housing for the poor

Social dialogue

•InstitutionsUpper and middle classesRights and crtizenshipPromote citizens participation on issues of collective interestImprove transparency and regulations and surveillance

Fiscal Responsibility

OpportunitiesCapacities

Solidarity Ownership

Page 34: REFORMING SOCIAL PROTECTION SYSTEM AND BASIC INCOME ANDRAS UTHOFF 13th International Conference of the Basic Income Earth Network Basic Income as an instrument

SOCIAL DIALOGUE, GRADUALISM AND SOLIDARITY

Technical componentes and Political

Macro stability

Minimun guaranteesTax burden and structureGovernability an productivity of public manages programsStabilization Funds and Contingent LiabilitiesCounter cyclical policies

Role of education

What level should be niversalClosing gaps

rural-urban socio-economicElite - públic

Pre-schooling for the poorLearnin to learnSchool insurance.

Employment

Address structural heterogeneityPro-employment investmentHuman resources policiesReduce discriminationLabor relation adapted to innvoation and economic cycle requirementsRe-trainingUnemployment insurance

Efficient, universal Social Security

Publico-private mixesIntegrate financing sources to incorporate solidaridaty without affecting insurance and savingsRiska rating mechanisms Housing for the poor

Social dialogue

•InstitutionsUpper and middle classesRights and crtizenshipPromote citizens participation on issues of collective interestImprove transparency and regulations and surveillance

FiscalResponsability

Solidarity

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RESCUING SOLIDARITY FROM THE 1980 – 1990 WAVE OF REFORMS

1980 – 1990 MAIN PROBLEMS 1990.2010

CONTRIBUTIVE PENSIONS1. DEFINED BENEFITS

1. PARAMETRIC2. DEFINED CONTRIBUTION

1. NOTIONAL2. FULLY FUNDED

1. SUBSTITUTIVE 2. MIXED3. PARALLEL

NON CONTRIBUTIVE PENSIONS Guarantees limited by public finance constraints

TRANSITION COSTS MATTERHistorical deficitsOperative deficitsRecognition bondsExplicit Rates

REPLACEMENT RATESPolitical costs of param. reforms Density of contributionsPension Fund rates of return

Administrative costsEconomies of scaleInsurance costs

Weak institutional developmentsMacroeconomicsFinancial

INTEGRATING NON CONTRIBUTIVE AND CONTRIBUTIVE FINANCING1. BASIC SOLIDARITY BENEFITS

1. COMPLEMENTARY2. ABSOLUT

2. CONTRIBUTORY SUBSIDIES1. BY GENDER ROLES SUBSIDIES2. BY AGE3. BY LABOR CONTRACTS

NON CONTRIBUTIVE3. UNIVERSAL BENEFITS TO SPECIFIC

GROUPS

REGULATION AND SUPERVISION

CONTRIBUTIVE HEALTH1. SOCIAL INSURANCE

1. Private plans2. Social Security

2. PUBLIC HEALTH

1. ADVERSE SELECTION2. RISK SELECTION3. MORAL HAZARD4. CONSUMERS SOVEREIGNITY5. PUBLIC GOODS

1. POOLING FINANCING SOURCES2. RISK RATING3. REGULATION AND SUPERVISION4. EXPLICIT GURANTEED PACKAGES

BASIC INCOME1. EMERGENCY PROGRAMS 2. SOCIAL INVESTMENT FUNDS

DEALING WITH CONSEQUENCES NOT CAUSES

CONDITIONING CASH AND IN KIND TRANFERS

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THE DESIGN OF FINANCING

• Social protection and basic income policies demand:– Increases in non contributive financing:

• tax reforms and • reallocation policies

– Integrate contributive and non contributive financing with

• a solidarity logic and • aligned incentives.

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SOCIAL DIALOGUE, GRADUALISM AND SOLIDARITY

Technical componentes and Political

Macro stability

Minimun guaranteesTax burden and structureGovernability an productivity of public manages programsStabilization Funds and Contingent LiabilitiesCounter cyclical policies

Role of education

What level should be niversalClosing gaps

rural-urban socio-economicElite - públic

Pre-schooling for the poorLearnin to learnSchool insurance.

Employment

Address structural heterogeneityPro-employment investmentHuman resources policiesReduce discriminationLabor relation adapted to innvoation and economic cycle requirementsRe-trainingUnemployment insurance

Efficient, universal Social Security

Publico-private mixesIntegrate financing sources to incorporate solidaridaty without affecting insurance and savingsRiska rating mechanisms Housing for the poor

Social dialogue

•InstitutionsUpper and middle classesRights and crtizenshipPromote citizens participation on issues of collective interestImprove transparency and regulations and surveillance

Fiscal

OportunitiesCapacities

CCP

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LAC CCPs PROGRAMMES

País Programa Inicio % Población total país Gasto/ Pib

Argentina Familias Por la Inclusión Social 2004  2.6% (2006) 0.12% (2006) 

Brasil Bolsa Familia 2003  22.2% (2006)  0.43% (2006)

Chile Chile Solidario 2002  6.45% (2005) 0.10% (2005) 

Colombia Familias en Acción 2001  4.2% (2006) 0.3% (2006) 

Costa Rica Superémonos 2000  1.12% (2002) 0.02% (2005)  

Ecuador Bono de Desarrollo Humano 2001  8.88% (2007) 0.49% (2006) 

El Salvador Red Solidaria 2005  24106 fam. (2006) 0.023% (2006)

Honduras Programa de asignación Familiar (PRAF) 1990  8.55% (2005) 0.022% (2006) 

Jamaica PATH 2002 8.86% (2006) 0.267% (2005) 

México Oportunidades 1997  25% (2005)  0.435% (2006)

Nicaragua Red de Protección Social 2000  2.7% (2005)  0.237% (2005)

Panamá Red Oportunidades 2006 12 mil fam. (2006) US mill. $ 46.9 (total proyecto)

Paraguay Tekoporâ 2005  0.65% (2006)  0.0026% (2006)

Perú Juntos 2005  3.6% (2006) 0.114% (2006) 

Rep. Dom. Tarjeta de Solidaridad 2005  8% (2005) 0.043% (2004) 

Uruguay Ingreso Ciudadano (PANES) 2005  9.46% (2006)  0.394 (2006)

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BACKGROUND

• Poverty limits the exercise of citizenships and legal rights.

• There are important intergenerational poverty transfer factors.

• Poverty is multidimensional and demands a wide range of interventions.

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Main achievementsShort term benefits

Reduction of poverty gaps and alleviation of crisis social costs

Long tern benefits

Human capital:

Better registration and attendance; promotion by grades and schooling.

To a minor extend they reduce child work.

Better access to primary and preventive health care.

Better nutrition.

Management

Multidimensional: education, health nutrition, housing, income, employment y family structures.

Inter-institutional coordination and implementation

Use of diverse transfers (cash, in kind, tickets, etc.)

Female roles are enhanced

Evaluation and monitoring

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Main challenges ahead

Impact

Not clear that benefficiaries will stay above the poverty line for ever.

May induce large work burden on women.

Management

Defining minimum benefits to be transferred (cash.

Low and hard to implement control of conditionality‘s

There is no clear theoretical and empirical grounds on graduation criteria.

Lack of complementary psychosocial interventions to change attitudes on education and child labor.

Targeting

Largely centered on children and pregnant women without consideration of other vulnerable groups (disabled, old aged).

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SOCIAL DIALOGUE, GRADUALISM AND SOLIDARITY

Technical componentes and Political

Macro stability

Minimun guaranteesTax burden and structureGovernability an productivity of public manages programsStabilization Funds and Contingent LiabilitiesCounter cyclical policies

Role of education

What level should be niversalClosing gaps

rural-urban socio-economicElite - públic

Pre-schooling for the poorLearnin to learnSchool insurance.

Employment

Address structural heterogeneityPro-employment investmentHuman resources policiesReduce discriminationLabor relation adapted to innvoation and economic cycle requirementsRe-trainingUnemployment insurance

Efficient, universal Social Security

Publico-private mixesIntegrate financing sources to incorporate solidaridaty without affecting insurance and savingsRiska rating mechanisms Housing for the poor

Social dialogue

•InstitutionsUpper and middle classesRights and crtizenshipPromote citizens participation on issues of collective interestImprove transparency and regulations and surveillance

FiscalResponsability

Ownership

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ECONOMIC AND SOCIAL RIGHTS, SOCIAL PROTECTION AND BASIC INCOME

• Three dimensions: –ethics –procedural –content

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CONCLUSIONS• NEW PARADIGM

– ACHIEVING THE NORMATIVE HORIZON OF SOCIAL PROTECTION AND BASIC INCOME POLICES IN UNEQUAL AND FINANCIALLY CONSTRAINT SOCIETIES DEMANDS INTEGRATION OF ALL SOURCES OF FUNDING. THE DEGREE OF INTEGRATION WILL DEPEND ON THE POLICY AIM.

• THE FISCAL SPACE– NON CONTRIBUTIVE FINANCING DEMANDS A PROGRESSIVE TAX REFORM, AND ACKNOWLEDGING

THREEPUBLIC FINANCE GOALS:• CONTRIBUTE TO MACROECONOMIC STABILITY• CONTRIBUTE TO THE STABLE FINANCING OF SOCIAL PROTECTION AND BASIC INCOME POLICES• PROMOTE INSTITUTIONAL DEVELOPMENTS ON SOCIAL POLICIES

• SOCIAL DIALOGUE – INCREASING NEED FOR CITIZENS PARTICIPATION TO AGREE ON FIVE COMPLEMENTARY POLICY AIMS

• FISCAL RESPONSABILITY• CONTINUOUS CREATION OF CAPABILITES• CONTINUOUS CREATON OF OPPORTUNITIES• IMPLEMENT SOLIDARITY IFINANCING FOR SOCIAL POLICIES• INCREASE OWNERSHIP AMONG CITIZENS

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THANK YOU

[email protected]

• Departamento de Economía • Universidad de Chile