wef gac case integrated model growth employment social protection report 2012

8/3/2019 WEF GAC Case Integrated Model Growth Employment Social Protection Report 2012

1/24

The Case for anIntegrated Model of

Growth, Employmentand Social Protection

Global Agenda Council on Employment and Social Protection


2/24

World Economic Forum

2012 - All rights reserved.

No part o this publication may be reproduced or transmitted in any orm or by any means,

including photocopying and recording, or by any inormation storage and retrieval system.

REF 200112


3/24

3The Case or an Integrated Model o Growth, Employment and Social Protection

4 Foreword

5 Executive Summary

7 Context

10 A New Integrated Approach

13 The Importance o Social Protection

17 Case Studies: The Integrated Model inPractice

21 Recommendations

22 Members o the Global Agenda Councilon Employment and Social Protection(2011-2012)

23 Bibliography

Contents

The views expressed in this report represent a collation o viewpoints emerging rom a series o discussionsamong the Members o the Global Agenda Council on Employment and Social Protection. The observationsand proposals in this document do not necessarily reect the indiv idual institutional viewpoints o any o thecompanies or institutions that took part, or o the World Economic Forum.


4/24

The Case or an Integrated Model o Growth, Employment and Social Protection4

As we enter 2012, huge uncertainties characterize economic prospects around the world. InEurope, which is currently at the centre o concern, growth has come to a standstill, even inGermany. In many o the peripheral countries, output is contracting. In the United States, thelast quarter o 2011 has seen a slight upturn, but most commentators agree that it remainsragile. In Japan, while there has been some expansion in production ater the eects o theFukushima disaster were overcome, projections remain very cautious.

In many o the emerging and developing countries, growth remains much more rapid, butthe problems o the advanced countries are taking their toll worldwide: there seems to be ageneral slowdown aecting many o the emerging countries also. Strong and sustained growthseems to be eluding the world economy. Moreover, where there is growth, most oten it is notaccompanied by vigorous job creation

At the time o writing, there appears less consensus on how to move orward than there wasin 2008 and 2009. The current Eurozone crisis has brought to the ore wholesale calls ormore austerity in Europe in the short run to reduce public defcits and instill confdence infnancial markets. But positive growth expectations are as important or confdence thandefcit reduction. Without growth supporting policies, austerity alone is more likely to create a

deationary spiral than a sustainable path to healthier economies and public fnances.The Global Agenda Council on Employment and Social Protection calls or a more growth-oriented and balanced approach one that ulflls the G20s own Pittsburgh commitmentto put quality jobs at the heart o the recovery. Citizens, not just fnancial markets, needconfdence confdence or consumers and or frms to invest, and, above all, confdence orour youth so that they can look orward to quality jobs and careers in dynamic economies andjust and open societies.

Employment can no longer be treated as a residual outcome o economic growth. Rather,employment growth is now necessary to bring about economic recovery. We also call orrecognition that well-designed systems o social protection have acted as important shockabsorbers in the crisis and need to be invested in and widened in the uture.

From the dierent backgrounds o business, labour, civil society and academia, we present this

call or action to move our economies onto a path o recovery and to develop a new socialcontract in the political economy that emerges rom the crisis.

Kemal Dervis Chair o the Global Agenda Council on Employment and Social ProtectionJohn Evans, Vice-Chair o the Global Agenda Council on Employment and Social Protection

Foreword

01


5/24


This paper is a call to action rom the Global Agenda Council on Employment and SocialProtection. Central to the argument presented here is the imperative to tackle the global jobscrisis. This must be a top priority or policy-makers despite the current ocus on sovereigndebt. While the problems in the Eurozone are consuming policy attention today, growth andemployment creation, in both the short and long term, are essential i the global economy is toexit rom the predicament perplexing policy-makers. This demands a new social contract basedon a new economic model, which places equal emphasis on growth, employment and socialprotection.

Context

The employment challenge is shaped by the wider economic policy context and the risks toa continued recovery. The prospects or the next year look bleak i current policies continue.That is the clear implication o the OECDs Economic Outlook and the IMFs most recentWorld Economic Outlook. A balance needs to be struck between support or growth andfscal consolidation. Rapid reductions in public expenditure are not universally desirable whenbusiness investment and household consumption are depressed in so many countries.

Addressing the crisis demands eective employment enhancing policy coordination at theglobal level, including through the G20 and International Monetary Fund (IMF). It is only in thisway that policies can be applied without countries fnding their credit ratings under threat almostno matter what the underlying budgetary position.

There are three signifcant challenges conronting policy-makers: stagnating incomes, risingunemployment and increases in income inequality. Consumers need to be confdent that theirincomes will keep pace with ination beore they will spend; unemployment is a brake onconfdence and growth. Income inequality can be a real threat to social cohesion and mustbe addressed as part o the process o constructing a new model o employment and socialprotection.

A New Integrated Approach

Growth, employment and social protection should be seen as elements o a virtuous circle

where high quality jobs and decent incomes can generate sustainable demand, where thereis proper protection against growing labour market risks and where social protection systemsare seen to provide a saety net, giving citizens the confdence to consume and businesses toinvest. Governments must move quickly to get the global economy moving again. The ollowingmeasures should be considered:

- Targeted investments in inrastructure- Public investment in green jobs- Shiting taxation rom employment to environmental bads- Targeted tax cuts or increases in cash transers to low-income households- Robust minimum wage oors to prevent wage deation- Provision o fnance or high-growth, small and medium-sized businesses- Greater progressivity in the tax system- Higher levels o investment in active labour market programmes

- Creating exible schemes to promote job retention and job sharing

The Importance o Social Protection

Social protection is relevant to countries at all levels o development. The stabilizing eects osocial protection policies can help to minimize the negative impact o recessions in developedcountries, maintaining purchasing power and preventing unemployment rom being acatastrophic experience. Social protection spending can act as a stimulus mechanism, aswell as rebalancing the economies o emerging markets by boosting domestic demand. In thedeveloping world, creating a social protection oor can reduce poverty at the same time asstructural transormations are incentivized.

Executive Summary


6/24


Recommendations

The Global Agenda Council on Employment and Social Protection is calling or the developmento a new growth model, which recognizes the importance o employment and social protection.There are fve principles that policy-makers should consider as they respond to the crisis anddevelop a new approach to growth, employment and social protection:

1. A coordinated growth stimulus will be required in 2012 to ensure that employment remainsa top priority. This is not to say that all countries can take expansionary fscal action but, asthe OECD has argued, even those with limited room or manoeuvre can slow the pace odefcit reduction i it is part o a careul global strategy.

2. There are priority measures that governments and companies can implement today toboost job creation and retention, such as introducing youth employment pacts or exible jobretention policies equivalent to the short-time working scheme in Germany. Tackling youthunemployment must be a top political priority.

3. Social protection is an important tool or stimulus and growth in the context o the crisis.Reorm o social protection systems in many countries may be needed (to take accounto demographic change or example), but this is more likely to be successully achievedwhen growth has resumed. Reorm eorts should proceed and oer maximum choice andexibility with the involvement o the social partners.

4. In the developing world, the establishment o a social protection oor is essential to reducepoverty and create the conditions or development. Cash transers to those on low incomescan be designed to be relatively inexpensive, can relieve poverty, boost domestic demandand contribute to the rebalancing o the global economy. By creating a sense o confdenceabout income security, citizens can be equipped to withstand what might otherwise beintolerably disruptive processes o structural change.

5. In all these cases, governments cannot act alone, but must engage the interest and support

o other social actors. This multistakeholder model can help to ensure that change is bothlegitimized and embedded. Trade unions, business and NGOs have a critical role to play.

01


7/24


Despite the powerul case or decisive action, unemployment is r ising in many countries; fscalconsolidation is being pursued with relentless rigour and growth prospects or the global

economy are poor. Without jobs, citizens will inevitably struggle to purchase the goods andservices needed to keep the global economy moving orward. And, i only insecure work isavailable, citizens will be more ocused on deerring consumption by saving or the bad timesthan on spending today. In some countries, welare states are under threat, labour markets arebeing deregulated and consumer confdence is weak. The pre-crisis economic model has sel-evidently ailed and the post-crisis policies are ailing to deliver their promised results.

The Economic Policy Challenge

Our discussion o the employment challenge is shaped by the wider economic policy contextand the risks to a continued recovery. The most recent World Economic Outlook publishedby the International Monetary Fund (IMF) has downgraded the orecasts or global growth toaround 4% in 2012, alling rom over 5% in 2010. For advanced economies, growth is expectedat what the IMF describes as an anaemic 1.5% in 2011 and 2% in 2012. Moreover, these

orecasts assume that the policy challenges in the US and the Eurozone are met successully,with the US striking a better balance between growth-supporting measures and fscalconsolidation, and the Eurozone dealing with the sovereign debt crisis to avoid a catastrophiccollapse in the banking sector.

The OECDs recently published Economic Outlook is even more pessimistic, suggesting thepossibility o a recession in the Eurozone, the prospect o fscal tightening in the US (whichmonetary policy will fnd it hard to counteract) and soter growth in emerging markets (OECD2011). The OECDs central projection, which is described as muddling through, is matched bya number o considerably worse scenarios.

Were there to be a serious relapse into recession, the OECD recommendations are clear governments must act much as they did in 2009. For example, those countries withconsiderable room or manoeuvre (Germany, Canada, Australia, South Korea) could administera signifcant stimulus. Even countries where public fnances are weaker (the US and the United

Kingdom) could slow the pace o fscal consolidation. Brazil, India, China and Indonesia, withcomparatively low debt ratios and strong budget positions, would be ree to take action tostimulate their own economies.

O course, there are some countries where the fscal space is either non-existent or small(Greece, Italy, Spain, Ireland and Portugal). A high level o policy coordination is essential ithese countries are to avoid intolerable pain; expanding in growing export markets will requiresurplus countries to administer the coordinated stimulus that the OECD recommends.

The nature o the macroeconomic policy dilemma can be simply expressed: it is essential atthe global level to strike the right balance between support or growth and fscal consolidation.As the IMF has now recognized, premature fscal consolidation can limit the possibilities or arobust recovery (Lagarde 2011, Ball, Leigh and Loungani 2011). Policy-makers have to makecredible commitments to reduce budget defcits and sovereign debt to stable and prudent

levels. But rapid reductions in public expenditure are not universally desirable when businessinvestment and household consumption are depressed in so many countries. Economicpolicy must be exible enough to allow governments to change course i an excessive dose oausterity is slowing the speed o the recovery.

The Need or Policy Coordination

An eective response to the crisis demands not just exibility at the national level, but moreinternational policy coordination. The G20 should develop an agenda or those countries withfscal room to manoeuvre to implement policies that boost growth. There must be agreementabout the pace and scale o fscal consolidation, a shared understanding o the role o monetarypolicy and a link to labour market policies. At present, there is a widespread belie that thespace or fscal activism is limited because o the sovereign debt problem; that monetary policycannot do a great deal more (because once interest rates are close to zero or are negativein real terms a urther reduction has little or no stimulatory eect), and quantitative easing is

ineective in countering a balance sheet recession.

Context


8/24


Some policy-makers have turned to structural policies, believing that measures to make labourmarkets more exible, develop human capital, liberalize product markets, reduce the regulatory

burden and tighten competition policy can compensate or the weakness o monetary andfscal policy. Yet the reality is that structural policies are unlikely to make much dierence in theabsence o the right macroeconomic policy and in some circumstances could make thingsworse, especially i the consequence is increased employment insecurity and downwardpressure on wages, neither o which are likely to inspire a rise in consumer confdence.

The priority must be to develop an international consensus on a new economic model thatdelivers the objectives o sustainable growth, high-quality employment and social protection.Despite positive conclusions o the G20 Cannes Summit (on employment, social protectionand social dialogue), we saw an almost exclusive emphasis on austerity policies, especially inthe Eurozone. I the G20 is to maintain its credibility as the place where decisions are takenand implementation plans agreed, then urgent action is required when the G20 heads ogovernment meet again in Mexico.

We do not underestimate the difculties o implementing counter-cyclical policies when theburden o sovereign debt is high in some countries and bond markets are nervous. But theseobservations, ar rom being arguments against a orm o global Keynesianism, reinorce thecase or improved coordination. I all countries act together, then the risk o investor ight awayrom those countries with high debt ratios will be limited and confdence will be much higher ithe G20 countries, in particular, all agree on the most appropriate trajectory or policy.Stagnating Incomes

The remainder o this paper develops some thoughts about the policies needed to strengtheninclusive growth across the global economy. Without growth there can be no eective fscalconsolidation and without confdent businesses and consumers there can be no growth. Itis essential or most citizens to experience rising real incomes. Unortunately, real incomes inmany countries, particularly in high-income countries, have either been stagnant or have allenin real terms since 2008. In a recent review, the International Labour Organization (ILO) and the

OECD ound that nine out o 10 countries under consideration had witnessed real income allsin at least one year since 2008. Over the period 2008-2010, wage growth was weak in France,Germany and the US, and was negative in Spain and the United Kingdom. As the ILO andOECD suggest: Care is needed to avoid a cycle o wage defation related to weak growth romurther weakening aggregate demand and uture growth. (ILO/OECD 2011)

Unemployment

About 27 million jobs have been lost directly as a result o the recession. In some countries,particularly in the developing world, most recent job growth has been in the inormal sector.As we explain in our discussion o the fnancing o social protection, this is not a sustainabledevelopment and action will be needed gradually to ormalize inormal employment.

While many G20 nations have seen reductions in unemployment over the last year, the poor

growth trajectory will certainly slow the pace, leaving unemployment at the end o 2011 closeto the peak recorded at the depth o the crisis. The prospects or 2012 look very difcult.According to the ILO, about 80 million new jobs are needed to return global unemployment tothe pre-crisis level. This ambitious goal is unlikely to be achieved without some signifcant policychanges.

Tackling youth unemployment must be the top political priority. Young people (aged 16-24) wholost their jobs frst in the recession are fnding it difcult to re-enter the labour market duringthe recovery. Rates o youth unemployment are twice or three times the adult unemploymentrate and sometimes more, with the r isk that the gap will widen as the recovery slows. Spainhas a youth unemployment rate o 45% and South Arica a rate o 50%. Even countries thatare doing much better economically have rates o more than 10%; the average across the EUis close to 20%. Youth unemployment has a scarring eect, making it much more likely that ayoung person will be unemployed later during their working lie. It is easy to talk about a lostgeneration, but unless decisive action is taken now to get the young unemployed back to work

that is precisely what many countries in the G20 could experience.

01


9/24


Income Inequality

Decisive action is needed to halt and reverse the rise in income inequality that many countrieshave witnessed over the last three decades. There are three signifcant reasons or this.

First, in many countries, income inequality was almost certainly a contributory cause o thecrisis. In the US in particular, stagnating real incomes were supplemented by excessiveborrowing (not least through mortgages) as a way to maintain or improve living standards. Riskwas supposedly diversifed through a range o fnancial derivatives, but when debt deaultsbegan to rise there was real concern about the ultimate value o these instruments, which leadto bank ailures and the global recession (Kumho and Ranciere 2010, Rajan 2010). Reducingincome inequality is, thereore, essential i the conditions are to be created or sustainablegrowth (Berg and Ostry 2011).

Second, social outcomes are better in more equitable societies, most notably health and lieexpectancy (WHO 2008). A healthier population is likely to be a more productive population,and there will be lower healthcare costs (because prevention is cheaper than cure) and ewer

people outside the labour market by reason o ill health and disability.

Third, income inequality, i let unchallenged, can be a real threat to social cohesion, leading totension between the auent and those in poverty, and a sense o disaection and an increasein social bads such as increased rates o incarceration, rising levels o marital breakdown andthe entrenchment o social disadvantage (Wilkinson and Pickett 2009).These arguments have been confrmed by the OECD in their most recent work on the growth oincome inequality in the developed world (OECD 2011). The arguments are not purely politicalor tactical but have a strong economic rationale too. There is a strong business interest inseeing the widespread trend to greater income inequality halted and reversed businessesneed confdent, prosperous consumers to buy the goods and services they produce.


10/24


01

A New Integrated Approach

The principal purpose o this document is to make the case that growth, employment and socialprotection are both interdependent and mutually reinorcing. Without growth, governments

cannot tackle the unemployment crisis; without jobs, citizens will be unwilling to consume. Iunemployment remains high then businesses will be unwilling to invest.

Growth, employment and social protection must be seen as elements in a virtuous circle wherehigh-quality jobs and decent incomes generate sustainable demand, where there is properprotection against growing labour market risks and where social protection systems are seento provide a saety net, giving citizens the confdence to consume and businesses to invest.Policy-makers must address the global jobs crisis, halt and reverse the trend towards greaterincome inequality, and reinvigorate social protection systems so that they are ft to meet thechallenge o an integrated global economy and an ageing population.

This paper also aims to show how the case or a new approach to growth is o relevance tocountries at all levels o development. Indeed, rebalancing the global economy will prove mucheasier i emerging market countries (principally the BRICs) boost domestic demand by building

their own social protection systems. Developing countries can make progress in relievingpoverty, and in boosting productivity and GDP i they make relatively small investments in theirsocial protection oors.

Short-term and Long-term Priorities

As a frst step, we should distinguish between short-term and long-term priorities. In the shortterm, governments must act to get the global economy moving again and tackle the blight ounemployment. In the long term, many governments will have to tackle the challenge o anageing population, ewer young people entering the labour market, and longer and more exibleworking lives. In other words, the demands on the welare state are likely to increase, andadequate pension provisions will depend on a revived partnership between the state, employersand citizens, with each making a contribution to the savings needed to ensure decent incomesin retirement.

This is not just a problem or developed countries. By 2050, there will be twice as many peoplein the world over the age o 60 as there are today; 80% o them will be living in developingcountries. This demands that social protection systems be reormed, but not abandonedor eroded. A very large number o retired people on very low incomes are not a recipe orprosperity or sustainable growth.

Addressing Short-term Challenges Getting the Economy Moving Again

We have already noted that the economic outlook or 2012 looks bleak i the current policymix continues to be administered without any signifcant change. Both the IMF and OECDhave argued that a major shit in policy will be required i the prospects or the world economydeteriorate urther. This means that the G20 should give urther consideration to a coordinatedapproach to macroeconomic policy.

Those countries with the space to do so should agree to use all the fscal policy instrumentsat their disposal. Other countries, who retain some market confdence, may wish to slow thepace o their fscal consolidation programmes. Every eort should be made to ensure thatthose countries with the most severe budget difculties and the highest debt to GDP ratioscan increase the volume o exports as a strategy to restore their economies to health. Specifcmeasures that could be considered are set out below.


11/24


Priority measures

1. Ensuring that investment, tax and regulatory rameworks are employment enhancing.

- Targeted investments in inrastructure should be made that will improve the long-termproductive potential o the economy and will create the largest number o jobs in theshort term. There should be a particular ocus on those regions and localities whereunemployment is highest with a view to developing targeted strategies, bringing togethera range o initiatives (inrastructure, investment in human capital, business investmentincentives) to create a comprehensive programme o economic regeneration.

- Public investment in green jobs to secure environmentally desirable objectives andleverage private sector investment in environmental technologies. This could include loansor grants or the retroftting o existing buildings, incentives or green construction or amore intensive ocus on recycling and resource productivity.

- A serious eort to shit the tax burden rom employment to environmental bads so thatemployers fnd it attractive to create jobs. This may need to be modifed in the uture; i thegoal is to reduce the incidence o pollution or the level o carbon emissions, then revenueswill all as businesses adopt more environmentally riendly technologies. In the short term,however, reducing payroll taxes could have a benefcial stimulatory eect that would berevenue neutral and employment enhancing i the burden were shited elsewhere.

2. Creating an environment where economic actors are confdent about the uture.

- Targeted tax cuts or increases in transer payments to put more money into the pocketso the low-income households most likely to spend it. In some developed countries, a cutin social security taxes might work well; emerging countries could learn rom Brazils BolsaFamilia, which proved to be a useul instrument or boosting domestic demand at limitedcost (26% o the population beneft at a cost o less than 0.5% o GDP).

- Where relevant, the extension o time limits or unemployment insurance payments. This ismost relevant in those countries with relatively weak automatic stabilizers such as the US.

- The introduction o minimum wages or other reasonable wage oors where they do not yetexist to oset the risk o a downward spiral o wage deation.

- Ensure that the banking system is working eectively in providing fnance or high-growth,small and medium-sized businesses. Some governments are developing programmes oso-called credit easing to improve access to fnance. While the precise orms may varyrom one country to another, the policy objective is o general application.

3. Implementing job creation and retention policies

- Youth unemployment has a scarring eect, making it much more likely that a young person

will be unemployed later during their working lie. To avoid the uture detrimental impact, theintroduction o a youth employment pact is important. Those under the age o 24 who havebeen unemployed or six months should beneft rom a special employment subsidy to beoered to frms willing to employ them or a period o one year, or a ull-time unded trainingplace or six months.

- Higher investment in active labour market programmes to improve the skills andemployability o the unemployed, particularly or those previously working in industriessubject to structural change where demand or such skills is alling.

- Introduction o exible schemes to prevent job loss, such as the kurzarbeit short-timeworking scheme in Germany in 2008-09. Public subsidies were available where workscouncils and employers had negotiated reductions in working time as an instrument to savejobs that might otherwise have been at risk. Workers were compensated by the state or upto 60% o lost earnings, which had the eect o minimizing the impact on their incomes and

acted as an automatic stabilizer. Interestingly, old policies like the kurzarbeit contributedmore to saeguarding jobs in the recession than any o the measures (The Hartz reorms,Agenda 2010) designed to make the German labour market more exible over the lastdecade.


12/24


01

Addressing Long-term Challenges Quality Jobs and Decent WorkEven though employment is the priority, the aim should not be to create jobs at any price but

to make clear that sustainable work is decent work. The imperative to develop a new model ogrowth, employment and social protection is a valuable opportunity to put these questions backon the agenda.

Research rom the United Kingdom has shown (Graham 2005) that too many people who havebeen unemployed fnd themselves in a revolving door, rom poor quality jobs to worklessnessto poor quality jobs. The actors that keep the previously unemployed in work include incomesrom work oering better living standards than a lie on benefts, a working environment thatgives people a sense o purpose and meaning, as well as trusting and supportive relationshipswith the employer.

Epidemiological research shows that high-quality work defned in these terms is also healthywork. Employees with decent jobs enjoy better health during their working lives, longer lieexpectancy and more years o active lie (Marmot 2004, WHO 2008). One might conclude,

thereore, that employers, governments and workers representatives have a shared interest intrying to create the decent work or which the ILO has argued. Businesses stand to beneftbecause they will have a healthier and more productive workorce. Governments stand tobeneft because healthcare costs will be generally lower, releasing resources or other uses.And trade unions beneft because they are working with employers to meet the expectations oemployees. Factors that constitute high-quality employment include:

- Employment security- Allowing workers to exercise autonomy, control the process o work and choose how they

organize tasks- An appropriate balance between the eorts workers make and the rewards they receive- Procedural justice in the workplace- Opportunities or workers to inuence employer decisions that aect the organization o

work and the design o jobs- The level o trust in the workplace, or what some have described as social capital (Putnam

2000)

Globalization and trade have the potential to raise global welare, but in the years beore therecession, despite rapid growth, the share o workers in the inormal economy either remainedconstant or expanded signifcantly (ILO/WTO 2009). There is a case or adopting a gradualapproach to the ormalization o the inormal economy, integrating workers into the tax andbenefts system at the same time as incomes are boosted through modest transer to those onlow incomes. By using instruments like the Bolsa Familia, the Brazilian government has, over adecade, reversed the ratio o ormal to inormal employment rom 40:60 to 60:40. In the longterm, developments o this kind in all countries will enhance fscal sustainability by increasing taxreceipts and providing the resources needed to und public goods, including a higher level osocial protection.

Making progress in addressing the short-term challenges will help policy-makers give proper

consideration to the long-term challenges sooner rather than later. It is ar rom easy to opena discussion about the need or later retirement and longer working lives in the midst o highunemployment and sluggish growth. And i the crisis conditions persist, then the threat to well-established public pension systems cannot be underestimated.

The same might be said o income inequality where a medium-term programme is required tohalt and reverse a trend that has been established in some countries or more than 30 years.Devising more progressive tax systems, boosting the incomes o those at the bottom o thedistribution scale and restraining excess at the top cannot be completed in the space o a year.Gradual improvements in minimum wages, a programme o investment in human capital andan agenda to reduce the reliance o some organizations on low pay, low-productivity businessmodels is an ambitious project.

This is equally true to re-establish the link between wage growth and productivity growthin those countries where it has been broken. Some commentators have suggested that

the bargaining power o employees on wages at and below the median must be improved(Kumho and Ranciere 2010). This is a signifcant challenge too because it requires strong andresponsible labour market institutions (trade unions and other actors) to ensure a airer initialdistribution o market incomes.


13/24


Social protection policies played a critical role in mitigating the impact o the global fnancialcrisis in 2008 and 2009. This was certainly true in those countries with stronger welare

states and where the automatic stabilizers (the payment o relatively generous benefts tothe unemployed and the willingness to maintain public spending despite alling tax revenues)had the eect o supporting purchasing power. Sustaining these policies is essential or thedevelopment o a new model o growth.

Slightly dierent arguments apply to developed economies, emerging markets and thedeveloping world, but in each case social protection has a critical role to play. For thesepurposes, the extent o social protection is defned in relation to the ollowing areas o socialpolicy:- Pensions- Unemployment benefts- Health and sanitation- Housing- Child and maternity protection

- Education or all

Countries with higher levels o social expenditure have lower levels o poverty and incomeinequality. This appears to be a universal truth or countries at all stages o development.We should recall that in the process o becoming the prosperous societies they are today,developed countries witnessed an increasing share o national output being devoted to publicexpenditure unding collective consumption (Lindert 2004). Indeed, rising social spendingcontributed to economic growth.

It is also clear that the existence o a social protection oor reduces poverty and inequality in allcountries. For example, the OECD estimates that levels o poverty in its member countries areabout hal o what they would be in the absence o such policies and institutions. The results aresimilar or middle and low-income countries studies in Senegal and Tanzania demonstrate thatmodest cash transer programmes or older people and children have the potential to close thepoverty gap signifcantly (Bachelet 2011).

Why Social Protection Matters

The case or social protection rests on our pillars:1. Social protection can act as an economic stabilizer during a crisis2. Social protection can kick-start demand as part o a stimulus package to speed up the exit

rom the crisis3. Social protection can be used to boost domestic demand and reduce reliance on export-

led growth in emerging economies4. The establishment o a social protection oor can accelerate the pace o development in

developing countries

Stabilizing: The stabilizing eects o social protection policies are generally accepted asimportant in maintaining purchasing power during a downturn, and, i governments allow

defcits to rise as tax receipts all, are important oundations on which a uture recoverycan be built. Indeed, a signifcant dierence between the immediate response to the post-1929 Depression and policy today is that the importance o automatic stabilizers is widelyunderstood. The difculty, o course, is that some countries, particularly those with prooundsovereign debt problems or rapid fscal consolidation programmes, are cutting benefts or theunemployed and other orms o social support at a time when incomes are under pressure anddemand is weak.

Stimulating: Increased spending on social protection was a central element in the fscal stimulusprogrammes implemented in the wake o the crisis. For example, in Brazil, the Bolsa Familia andunemployment insurance benefts were raised, injecting some US$ 30 billion into the Brazilianeconomy, saving or creating around 1.3 million jobs. In the US, the Congressional Budget Ofceestimated that the extension o unemployment insurance and other social transers had a biggermultiplier eect than reductions in taxes or the better o or incentives or frst-time homebuyers.In Indonesia, 7% o the stimulus package was directed towards low-income households, with

an overall increase o 34% on social protection spending in 2009. The results were impressive:an increase in spending on childrens education and health needs; an increase in immunizationrates; improved inrastructure leading to more rapid economic development; improvements inwater quality, transport and productivity; and reductions in the cost o living, moderating theimpact o ood shortages or price increases (Bachelet 2011).

The Importance of Social Protection


14/24


01

Rebalancing: Emerging market countries can use social protection to adapt their economicmodels and move towards a path that attaches importance to domestic markets and exports.

One consequence o the Asian crisis in 1997 was that countries began to build up signifcantlevels o oreign exchange reserves to insure against the risk that rapid disinvestment couldhave a catastrophic and immediate impact on the stability o the banking system. At the sametime, and oten as a result o relatively weak social protection, households were required tosave to insure themselves against the risk o ill health, old age and unemployment. These twophenomena helped to create some o the imbalances in the global economy surpluses inAsia, large defcits in the US and to a lesser extent the United Kingdom that both causedand intensifed the fnancial and economic crisis in 2007-2008. Boosting domestic demand byexpanding social protection is now at the heart o economic policy in China.

Developing: It is sometimes said that social protection is a luxury that developing countriescannot aord. But as the Bachelet report points out, relatively small investments can have bigsocial eects: reducing poverty, encouraging entrepreneurship, boosting school attendance andimproving nutrition. Creating a social protection oor is not just a consequence o development

but part o the process o development.

Relevant to Countries at All Levels o Development

For developedcountries, social protection allows the risks experienced by most citizens to bemanaged eectively. It ensures that disruptive processes o social and economic change haveless than devastating eects on those most at risk, it legitimizes the operation o markets, whichotherwise might be subject to undamental challenge, and it ensures, at least in principle, that allcitizens can develop the capabilities they need to choose lives that they value (Sen 2009).

Well-developed healthcare systems, decent pensions and the extensive provision o educationservices are all taken or granted by electorates in the most successul northern Europeancountries. Elsewhere, it is sometimes said that these services are unaordable or a burdenon business or a threat to competitiveness, but in reality the dynamism o most successuleconomies has been due to a symbiotic relationship between markets and public services.

Businesses need healthy, well-educated, committed workorces with an appetite or changeand innovation. Dismantling the edifce o social protection developed over a century or more osocial policy would be as much o a threat to enterprise as to the social cohesion o developedeconomies.

For emerging markets, social protection can, as we have seen, play an important role inrebalancing an economy rom a ocus on export led growth to the development o domesticdemand. Chinas 12th Five-Year Plan is deliberately designed to restructure the economy inthis way. Among the pro-consumption initiatives are incentives or the development o labour-intensive sectors and wage increases alongside measures to widen the coverage o pensions,healthcare and unemployment protection. All o these policies build on the successul MinimumLiving Standards Scheme, which had 22 million benefciaries in 2002 and was a response to theunemployment generated by the restructuring o state owned enterprises, initially in urban areasand then in rural communities.

For developing countries, social protection obviously reduces social risks, but can alsocontribute to productivity and growth. Mauritius managed the transition rom a monocropeconomy to a high-growth economy with the lowest poverty rates in Arica partly because theprovision o a social pension made it possible to legitimize this radical reorm. In Mozambique,recipients o a ood subsidy programme use the money as working capital or small-scale trade.In Kenya, a ood-or-work programme resulted in a 52% increase in net arm incomes withincreased levels o capital investment. Moreover, the poverty reduction results are impressive. InEthiopia, a public works and unconditional cash transer programme reached 8 million people,increased livestock holdings by 14% and guaranteed 30% more ood to benefciaries in droughtaected areas. In Kenya, the Orphans and Vulnerable Children Programme resulted in a 15%increase in school enrolments or primary schools. As in the developed world, there can be nodoubt that these interventions are equipping citizens with the capabilities they need to chooselives that they value.


15/24


Financing Social Protection

Sluggish growth and the possibility o another global recession will raise serious questionsabout the unding and aordability o well-developed social protection systems. There arevoices in developed countries that demand the reorm o pensions systems, public servicesand labour markets on the grounds that these arrangements are simply unsustainable in a morecompetitive world. Reorm may be needed to take account o demographic change, but this ismore likely to be successully achieved when growth has resumed.So ar as pensions are concerned, the critical questions include:- To what extent do retirement ages need to rise and by how much?- What additional contributions might be required?- Who will pay and how much will they pay?- How will this very dierent labour market be managed and who will be responsible or

developing good practice in managing an older workorce?

In developed countries, similar questions apply to healthcare, education and public services

more generally. It is clear rom the Nordic experience, however, that the development oa comprehensive welare state is no obstacle to good economic perormance. By way ocontrast, the recent perormance o the US suggests that a relatively underdeveloped socialprotection oor is a cause o weakness and instability rather than strength (Rajan 2010). In otherwords, it is not that welare states are unaordable but a question o who pays and how much.

Where social protection systems need to be reormed, governments have a choice. They caneither impose change or they can negotiate change with the relevant stakeholders. Buildingconsensus with social partners may be slower, but is a more certain way to a durable solution.


16/24


01

Developed Countries

The diversity o systems should be recognized; developed countries have taxpayer-unded

provisions, insurance-based systems and sometimes wholly private sector arrangements (aswith the US healthcare system with the exception o provision or the elderly and those living inpoverty). Prescribing an ideal set o fnancing arrangements or the developed world would notbe helpul in moving this discussion orward, although there are some undamental principles oadequacy and eectiveness that might be derived rom the experience o OECD countries.

It would also be wise to recognize that a partnership between the state, business and citizensis oten the oundation on which robust fnancing arrangements have been built. In somecountries, this is already the case with the pensions system where state provision is supportedby private arrangements based on contributions rom workers and their employers. Similararrangements might be considered or the education system. For example, employers couldsponsor students and und tuition ees. Alternatively, policy-makers might encourage thedevelopment o savings schemes that could be used to und the costs o education, childcareand care or the elderly.

Even i these possibilities are realized in practice, the core o the social protection system (statepensions, primary and secondary education, out o work benefts) is likely to remain principallytax unded with contributions rom individuals and corporations. Once again, though, therewill be variations across countries in the generosity o support available depending on thetolerance o electorates or progressive taxation systems with relatively high marginal rates.This is essentially a matter o social and political choice. It is unlikely that the US will experienceSwedish rates o taxation in the near uture or that a radical tax-cutting agenda would survivea conrontation with the Swedish electorate. In other words, so ar as the developed worldis concerned, the mix will vary rom one country to another as a result o culture, history andpolitical preerence.

Developing Countries

For the developing world, the questions are rather dierent. How can low-income countriesfnd the fscal space to develop a social protection oor? As the Bachelet report explains, the

costs o developing a basic social protection package would be between 2.2% and 5.7% oGDP (Bachelet 2011). A universal pension or individuals over the age o 70 could be as little asbetween 0.2 % and 0.8% o GDP in low-income countries surveyed (Knox-Vydamov 2011). Therelatively small sums involved may provoke some surprise that more countries have not madeprogress.

The barriers to implementation may be high but are not insurmountable. What more mightdeveloping countries do? To begin with, social protection requires sustainable and long-termfnancing and some developing countries have ound it difcult to make this commitment.Most importantly, perhaps, low and middle-income countries ace a variety o challenges inbroadening their tax base. The causes might be located in the high level o inormality in labourmarkets and weak institutional capacity. It is very hard to collect taxes (whether income taxes orpayroll taxes) i employers and employees operate beyond the margins o legality. The phasedormalization o employment would help, but in the meantime developing countries should look

elsewhere or resources. Possible options might include taris on commodity exports, land andproperty taxes, urban property taxes and agricultural marketing boards (Di John 2011).

Besides these options, governments themselves could use increased unding and coordinationrom donor countries. For example, the Bachelet report recommends the ollowing:

- Predictable multi-year support or the strengthening o nationally-defned social protectionoors in low-income countries

- Cooperation between OECD donors and emerging donors like the BRIC countries to buildpredictable unding through direct budgetary support, as well as building on the directexperience o the emerging market countries in building their own social protection systems

- Development o innovative fnancing mechanisms such as the fnancial transactions taxor the carbon tax on international shipping recommended in the Innovation with Impact:Financing 21st Century Development report presented by Bill Gates to the G20 inNovember 2011; the report also recommended that developing countries could improve

their systems or raising taxes rom extractive industries including oil, gas and mining.


17/24


In this section we present a series o countrycase studies that demonstrate how dierent

elements o the model described so ar havealready inuenced the development o policy:

Inclusive Growth

- How Sweden moved rom being a poorand largely agricultural economy to acountry with a very high standard o socialprotection.

- Employment measures: The short-time working scheme in Germany is anexample o how the state can supportaction by employers and employees tominimize the risks to employment duringa downturn. It shows that preserving

jobs is oten more economically rationalthan allowing jobs to disappear. It alsodemonstrates the importance o creatingincentives or dialogue between the socialpartners so that cooperation rather thanconrontation is the immediate responseto a crisis.

- Youth pacts: A number o countries haveintroduced support schemes to ensureyoung people are in a job or vocationaltraining, such as Germanys dualvocational training system.

Social Protection

- South Arica and Brazil have taken

steps on the same path as Sweden andhave seen big improvements in socialoutcomes.

- The Mexican case studies demonstratethat governments can proceed on a broadront simultaneously, with changes tolabour market and health policy, both owhich have produced benefcial economicoutcomes.

Case Studies:

The Integrated Model in Practice

Sweden: Social Protection a Precursor to Economic Growth and Development

Sweden was comparable to many low-income countries at the outset o its welaredevelopment, but now ranks in the top fve countries in the World Economic Forums GlobalCompetitiveness Report. There are parallels between the socioeconomic context o Swedenat the outset o implementing social protection with low-income countries today. Towards theend o the 19th century, Sweden had a per capita income comparable to that o Cambodia andTajikistan today.

The development o extensive social protection was core to transorming Sweden rom oneo the poorest European countries to one o the most prosperous. When Sweden beganimplementing social security it was one o the poorest European countries. At the end o the19th century, Sweden took the lead alongside a handul o other European countries to broadensocial spending on the back o industrialization o natural resource sectors. Urbanization andchanging household structures increased the need or more suitable social protection. Aterincreasing investments in education, in 1913 Sweden guaranteed a state pension to all men

and women over the age o 67, which was ollowed by employment benefts or the sick anddisabled.

By 1917, Sweden developed a universal health care system, and by 1930 was spending morethan 2% o GDP on social transers. It is important to note that investment in the health systemand pensions were precursors to economic development in Sweden and as such contributed toeconomic growth. Over the last 10 years, Sweden has achieved an economic growth rate thatexceeded the European average, with lower than average unemployment.

The Swedish social protection system is built on the principles o equal rights to education,health care and social insurance, with the state taking on primary fnancial responsibility.Sweden spends 12.6% o GDP (2007) on cash benefts.

Kurzarbeit The German Short-time Working Scheme

Thekurzarbeitergeld(short-time working compensation programme) is administered by theGerman public employment service. Since January 2009, the programme has been redesignedto take account o the severity o the global fnancial crisis.

- To be eligible or the programme, companies simply have to show that the aectedemployees have suered a reduction in wages o more than 10% (employers have to showthat one-third o employees have been aected).

- The eligibility period has been extended rom 18 to 24 months (having initially beenextended rom 12 to 18 months when the crisis just began to take hold).

- Extra fnancial support has been introduced to oer incentives to organizations that oered

employees training opportunities i the short-time working scheme is being used.- The government covers hal o the employers social insurance contributions and all o theirassociated contributions relating to the payment o short-time work allowances ater sixmonths o the programme, or all o their associated contributions rom the beginning o theclaim i the employer oered the workorce the required training opportunities.

Consistent with our general argument about stakeholder engagement as an ingredient o crisisresponse policies, German workers have strong institutional guarantees that negotiated hoursand earnings reductions will be open, transparent and air. The universal coverage o collectivebargaining, combined with eective workplace representation through work councils, helps toensure that workers are participants in these processes.

As the German Ministry o Labour has pointed out, the scheme makes fnancial sense becausethe costs o the short-time work allowances are generally lower than unemployment benefts.Moreover, i the training option is used, the German economy will beneft rom an improvement

in human capital, ensuring that the employer can respond well to the economic recovery whenit materializes.

There are no restrictions imposed on the programme all companies in all sectors are eligible.As we have noted, i the employer has a work council, then the hours and pay reductions mustbe agreed with the workers representatives. I not, then each o the aected employees must


18/24


01

consent to the arrangement. At that point the employer can make an application to the regionalunemployment service to ensure that:

- At least one employee has suered a reduction in wages o at least 10% as a result o a allin demand caused by the current economic conditions

- It is reasonable to assume that the situation will improve in 24 months, allowing or thereinstatement o normal weekly working hours

- All other options or managing the reduction in demand have been exhausted.

This last condition is more than a ormality. The employer must be able to oer evidencethat they have considered and implemented other courses o action, an important limitationpreventing abuse o the scheme.

I the employers application is accepted, the ederal authorities (essentially the employmentservice) compensate the employees or the sacrifce o wages at the level o 60% o lost netearnings or employees with no children and 67% or those employees with children. The

reimbursement o employer social security contributions is another incentive to agree reductionsin hours and earnings.The German scheme is not unique and analogous arrangements can be ound in 11 other EUmember states and Norway. Some o these schemes oer incentives or skills development;others do not.

Germany and Australia: Youth Pacts

The Dual Vocational Training System in Germany is recognized as a contributor to alling youthunemployment rates. The in-company training component o dual vocational training coursesprovides students with frst-class proessional qualifcations, ensures that a high percentage otrainees fnd employment in the labour market and helps to reduce youth unemployment. Thereare currently about 1.6 million young people undertaking dual vocational training in Germany.

Students who successully complete such a course have the skills needed or a proessionas a skilled worker in one o approximately 345 occupations requiring ormal training. Thesystem is called dual because training takes place in two learning institutions: a companyand a vocational training college. The scheme aims to train students to do a specifc job. Aterfnishing their vocational training, the trained skilled workers have the requisite qualifcationsneeded to perorm a specifc occupation.The system is based on an equal partnership between the public (government, schools) andprivate sectors. Many other countries are now looking to introduce systems similar to thedual training system, with the aim o reducing youth unemployment and strengthening the linkbetween education and employment systems (training and labour market).

In Australia, 10% o 15-24 year olds are not in school, training or employment. In 2009, theAustralian government introduced its Compact with Young Australians, known as the Earn or

Learn initiative. The Compact is designed to ensure that all Australians under 25 are working,studying or training, or some combination o these, with eligibility or relevant youth allowancepayments being tied to participation requirements.

As part o the Compact, there is a guaranteed entitlement or those aged 15-24 to an educationor training place or any government-subsidized qualifcation, subject to admission requirementsand course availability. For those aged 20-24, the entitlement is or a qualifcation higher thanany current qualifcation they hold.

The government also introduced the Apprentice Kickstart scheme to address allingapprenticeship commencements in 2009, tripling the commencement bonus or employerstaking on apprentices rom US$ 1,500 to US$ 4,850.

Group training is an innovative eature o the Australian apprenticeship system whereby a singlegroup training company takes on the responsibility o employing the apprentice and sourcing

the host employers. It is a mechanism or sharing the risk o employing an apprentice, andmeans that apprentices employment security is not tied to a single employer. It also givesapprentices access to dierent on-the-job experiences.


19/24


Social Protection in South Africa and Brazil: Common Elements of Success

South Arica and Brazil are both leaders in providing extensive, near-universal social protection oors. Both disburse cash transers to about25% o the population, as well as providing social and welare services. In both countries, social protection has achieved substantial social andeconomic impacts. There are a number o signifcant parallels in the political drivers or social protection.

Primary Targets/RecipientsSouth Arica and Brazil identifed children and older people as primary targets o social protection, both in terms o numbers o recipients andbeing the frst groups to beneft rom social protection programmes. The tables below outline the largest cash transer programmes o bothcountries, among which social pensions and children grants receive signifcant budgetary commitment o between 2-3.5% o GDP.

Table 1 Largest Cash Transer Programmes: South Arica

Source: Data rom National Budget 2011, Treasury o South Arica, see http://www.treasury.gov.za/documents/national%20budget/2011/review/chapter%207.pdusing US$ conversion rates on 3 August 2011.

Table 2 Largest Cash Transer Programmes: Brazil

Source: Data rom pension-watch database www.pension-watch.netand Paes-Sousa et al (2011)

Substantial Social and Economic ImpactsWidespread evidence o developmental impacts o social protection in both countries, including:- Reduced poverty and inequality: In South Arica, child poverty without child support grant would be almost 50%; in Brazil, 30% o

the reduction in inequality between 2001-2004 has been attributed to social pensions and 20% o the reduction in equality between1995-2004 to the Bolsa Familia programme.

- Increased school attendance: In South Arica, pension led to an 8% increase in enrolment among the poorest 20%; similar impactson school enrolments reported in Brazil.

- Economic stimulus: Through the injection o cash to economically marginalized regions sectors o the population, economic stimulushas spurred knock-on impacts on consumption and maintained domestic demand in Brazil, and promoted job searching and labourmarket participation in South Arica.

Programme Target Group Coverage Spending

Old age grant Men and women age 60+ 2.6 million US$ 5 billion

War veterans grant War veterans 0.001 million US$ 2 million

Disability grant Disabled adults unable to work 1.3 million US$ 2.5 billion

Child support grant Children age 1-16 rom poor households 10 million US$ 4.5 billion

Care dependency grant disabled children age 1-18 payable to parents/caregivers

0.4 million US$ 234 million

Foster care grant Foster parents 0.5 million US$ 723 million

Social relie o distress Temporary hardship/emergency beneft orthose ineligible or above

US$ 21 million

Total All non-contributory cash grants 14 million 3.5% o GDP, or approximately 12% o total government spending

Programme Target Group Coverage Spending

Bolsa Familia Poor households with school age children 12.4 million amilies US$ 7.7 billion, 0.4% o GDP

Rural Pension Previdencia Rural

Older workers rom the inormal (rural) sector 7.9 mill ion pensions 0.8% GDP

Continuous Cash Beneft BPC: Benefcio dePrestacao Continuada

Older people in poverty and disabled people 3.2 millionbenefciaries

US$ 12 billion, 0.6% GDP


20/24


01

Programme of Temporary Employment in Mexico (PET)

PET grants temporary income or men and women aged 16 or older in periods o low labourdemand through participation in amily or community projects in the areas o health, education,conservation o cultural and archaeological sites, and building rural roads. The budget or thisexisting programme was increased by 64% in 2009 to help alleviate workers and amilies duringthe crisis, and its coverage was extended to include urban areas in addition to the rural areaspreviously covered. The amount o time spent in such work depends on the type o project andmust not exceed 132 working days per year.

Since 2008, the National Employment Service (SNE) has operated emergency programmesdesigned to address the needs o people in employment contingencies due to economic and/or social difculties. To meet the needs o the Mexican population, the SNE has diversifed,positioning itsel as an instrument o dynamic employment policy, able to adapt to labourmarket demands and respond eectively and in a timely manner. The SNE expanded itscoverage and reocused its attention to address not only the unemployed and underemployed,

but to include workers who are at risk o losing their jobs or whose income has been aected.

New programmes added in 2009 led to the ollowing: 5,078 people were employed intemporary compensation schemes; 37,819 people were linked into the SNE TemporaryEmployment Programme; and 66,555 people were able to keep their jobs or income throughthe training o temporarily laid-o workers and programmes to support employment and thetourism sector.


21/24


The objective o this paper has been to make the case or a new approach to growth,emphasizing the importance o employment and social protection. Recognizing these

interdependencies represents a departure rom the pre-crisis paradigm, where social protectionis no longer seen as a cost to the economy but as a source o resilience in tough times and as asupport or growth and productivity when times are good.

It would be easy to argue that the measures proposed in this paper are limited in applicabilityto times o prosperity, but are unaordable when the global economy is growing slowly. Ourresponse, however, is that without growth all other economic policy objectives will remainelusive. The core o the argument presented here is that action is needed to develop theintegrated model o growth, employment and social protection i the world economy is to berestored to health.

A theme running through this paper is that governments are more likely to make progress whenthey have the support o other actors, including business, trade unions and NGOs. This isnot to say that all countries will adopt the same approaches. Institutions are very dierent and

the capacities o the parties will vary enormously. What we can be certain o is that inclusiveapproaches, however defned, are more likely to be eective.

A Five-Point Plan or Growth, Employment and Social Protection

We recommend that policy-makers develop policies consistent with the ollowing principles:

1. A coordinated growth stimulus will be required in 2012 to ensure that employment remainsa top priority. This is not to say that all countries can take expansionary fscal action but, asthe OECD has argued, even those with limited room or manoeuvre can slow the pace odefcit reduction i it is part o a careul global strategy.

2. There are immediate measures that governments and companies can implement today toboost job creation and retention, such as introducing youth employment pacts or exible jobretention policies equivalent to the short-time working scheme in Germany. Tackling youth

unemployment must be a top political priority.

3. Social protection is an important tool or stimulus and growth in the context o the crisis.Reorm o social protection systems in many countries may be needed (to take accounto demographic change or example), but this is more likely to be successully achievedwhen growth has resumed. Reorm eorts should proceed and oer maximum choice andexibility with the involvement o the social partners.

4. In the developing world, the establishment o a social protection oor is essential to reducepoverty and create the conditions or development. Cash transers to those on low incomescan be designed to be relatively inexpensive, can relieve poverty, boost domestic demandand contribute to the rebalancing o the global economy. By creating a sense o confdenceabout income security, citizens can be equipped with to withstand what might otherwise beintolerably disruptive processes o structural change.

5. In all these cases, governments cannot act alone but must engage the interest and supporto other social actors. This multistakeholder model can help to ensure that change is bothlegitimized and embedded. Trade unions, business and NGOs have a critical role to play.

In this paper, we have outlined an extensive menu o policy options that exempliy theseprinciples. We urge policy-makers to not only consider this approach in principle, but recognizethat practical action must be taken as soon as possible. The next G20 summit in Mexico City isan invaluable opportunity. The world cannot wait long or a solution to the deepest global crisisin several generations. The time or action is now.

Recommendations


22/24


01

Members of the Global Agenda Councilon Employment and Social Protection(2011-2012)

Ron Blackwell, Chie Economist, AFL-CIO, USARichard Blewitt, Chie Executive, HelpAge International, United Kingdom

Sharan Burrow, General Secretary, International Trade Union Conederation (ITUC), BelgiumKemal Dervis, Vice-President and Director, Global Economy and Development, The BrookingsInstitution, USAJohn Evans, General Secretary, Trade Union Advisory Committee to the OECD, FranceOlivier Ferrand, President, Terra Nova, FrancePrakash Loungani, Advisor, Research Department, International Monetary Fund (IMF), USAJos Antonio Ocampo, Proessor, Proessional Practice o International and Public Aairs,Columbia University, USAMohammed Mousaa AbdelGawad Omran, Chairman, The Egyptian Exchange, EgyptStephen Pursey, Director, Policy Integration Department and Senior Adviser to the Director-General, International Labour Organization (ILO), SwitzerlandPremkumar Seshadri, Senior Corporate Ofcer and President, Financial Services & Healthcare,HCL Technologies, IndiaThero Setiloane, Chie Executive Ofcer, Business Leadership South Arica, South Arica

Zhang Xiulan, Proessor and Dean, School o Social Development and Public Policy, BeijingNormal University (BNU), Peoples Republic o China

The Global Agenda Council would also like to thank:

Arup Banerji, Director, Social Protection and Labour, The World Bank, USA; Member o theGlobal Agenda Council on Youth UnemploymentDavid Coats, Director, Workmatters Consulting and Research Fellow, The Smith Institute,London

From the World Economic Forum

Saadia Zahidi, Senior Director, Head o ConstituentsJennie Oldham, Associate Director, Civil Society Organizations; Global Leadership FellowPatrick McGee, Senior Research Analyst, Global Agenda Councils


23/24


Bibliography

Bachelet, Michelle. Social Protection Floor or a Fair and Inclusive Globalization. Geneva: ILO,2011.

Ball, Larry, Daniel Leigh and Prakash Loungani. Painul Medicine. In Finance & Development,Vol. 48, No. 3, September 2011.

Berg, Andrew and Jonathan Ostry. Inequality and Unsustainable Growth: Two Sides o theSame Coin? In IMF Sta Discussion Note No. 11/08, April 2011.

Coats, David, with Lekhi, Rohit. Good Work: Job Quality in a Changing Economy. In The WorkFoundation, 2008.

Di John, J. Taxation, developmental state capacity and poverty reduction. In InternationalJournal o Social Welare, Vol. 20, No. 3, pp. 270-279, 2011.

Gallie, Duncan (ed). Employment regimes and the quality o work. Oxord University Press,

2007.

Gates, Bill. Innovation with Impact: Financing 21st Century Development. 2011.

Graham, Jenny et al. The role o work in low income amilies with children. UK Department orWork and Pensions, 2005.

Short-term employment and labour market outlook and key challenges in G20 countries.Prepared by the ILO and OECD or the G20 Meeting o Labour and Employment Ministers,Paris, France, 26-27 September 2011.

World Economic Outlook. September, 2011. Washington DC: IMF.

Keynes, John Maynard. Essays in Persuasion. 1931.

Knox-Vydmanov, C. The price o income security in older age: Cost o a universal pension in50 low- and middle-income countries. In HelpAge International, 2011.

Kumho, Michael and Ranciere, Romain. Inequality, Leverage and Crises. Working PaperWP/10/268). 2010. Washington DC: IMF.

Lagarde, Christine. Dont Let Fiscal Brakes Stall Global Recovery. The Financial Times, 15August 2011.

Marmot, Michael. Status Syndrome, Bloomsbury, 2004.

Economic Outlook. 2011. Paris: OECD.

Rajan, Raghuram G. Fault Lines: How hidden ractures still threaten the world economy,

Princeton University Press, 2010.

Wilkinson, Richard and Pickett, Kate. The Spirit Level: Why Equality Is Better or Everyone, AllenLane, 2009.

Closing the gap in a generation: Health equity through action on the social determinants o

health. 2008. Geneva: WHO.


24/24

World Economic Forum9193 route de la Capite

CH-1223 Cologny/GenevaSwitzerland

Tel.: +41 (0) 22 869 1212Fax: +41 (0) 22 786 2744

The World Economic Forumis an independent internationalorganization committed toimproving the state o the worldby engaging business, political,academic and other leaders osociety to shape global, regionaland industry agendas.

Incorporated as a not-or-proftoundation in 1971 andheadquartered in Geneva,Switzerland, the Forum istied to no political, partisanor national interests.

wef gac case integrated model growth employment social protection report 2012

Documents