The PAYG system and the optimal redistribution instrument in an overlapping generation model

Using a two‐period overlapping generation (OLG) model, this article seeks to identify the optimal redistribution policy instrument in terms of aggregate welfare when agents differ according to their labour condition. We use five policy specifications: (i) early redistribution to the young informal generation; (ii) late redistribution to the informal old generation; (iii) a mix between early and late redistribution; (iv) redistribution from the current formal young generation to the current formal old one; and (v) a non‐redistribution scenario. With inelastic labour supply, we show that transferring to the young performs better as a redistribution policy. This result is robust across different parameter values.     

Biometric technology and beneficiary rights in social protection programmes

Over the past decade, the use of biometric technology in the identification and authentication of beneficiaries of social protection programmes has increased. However, there has been little debate among governments, donors and civil society organizations on the potential implications of this technology in relation to the inclusion of the most vulnerable sectors of the population, as well as for the protection of privacy and personal data. This article aims to fill that gap. First, the article reviews how biometric technology is used in various social protection programmes around the world. Then, it examines the potential risks and challenges of deploying biometric technology in social protection programmes. Finally, it assesses the requirements necessary to ensure that biometric technology is implemented in compliance with international law standards. The focus is on developing countries, where the use of biometric technology in identification systems has increased considerably in recent years. Among the key conclusions of the article is that the adoption of biometric technology, often encouraged by donors, needs to be preceded by democratic debate where all alternatives are discussed. The adoption of this technology should be accompanied by a context‐specific assessment of risks, and the adoption of an appropriate legal and institutional framework to protect rights and ensure that the most vulnerable and disadvantaged members of the population are not excluded.     

Analysis of the implementation of a social protection initiative to admit the poorest of the poor to mutual health funds in Burkina Faso

To enable mutual health funds to extend coverage to poor people, the Mutual Health Support Network (Réseau d’appui aux mutuelles de santé – RAMS) in 2012 launched an initiative in collaboration with the Ministry of Social Action and Solidarity (ministère de l’Action sociale et de la Solidarité nationale – MASSN) in Burkina Faso. This article reveals difficulties in the initiative's implementation, which resulted in the continued exclusion of poor people from health services. Poor people were required not only to make co‐payments, but also to accept a limitation of coverage to three episodes of illness per year. Additional challenges to service takeup were the geographical distance of the homes of some beneficiaries covered by a mutual fund agreement from a health centre and the failure by some health workers and managers of pharmacies to recognize the mutual membership card. A formal framework was lacking that brought together all the actors involved in planning and implementing the initiative. Those involved did not all have the same information. Each structure performed the tasks within its scope, according to its own interests, but without consulting the other parties, and there was no platform for discussing implementation difficulties.     

Has the redistributive effect of social transfers and taxes changed over time across countries?

In most Member countries of the Organisation for Economic Co‐operation Development (OECD), the income gap between rich and poor has widened over the past decades. This article analyses whether and to what extent income taxes and social transfers have contributed to this trend. Has the redistributive impact of different social programmes changed over time? We use microdata from the LIS Cross National Data Center in Luxembourg for the period 1982–2014 and study both the total population and the working‐age population. In contrast to the results of some other studies, especially by the OECD, we do not find that redistribution has declined. Tax‐benefit systems around 2013 are more effective at reducing income inequality compared to the mid‐1980s and the mid‐1990s, especially among the total population. Changes in social programmes are not a driver of greater income inequality across the countries included in this study.     

Access to social protection among people with disabilities: Evidence from Viet Nam

Although people with disabilities are frequently targeted as key beneficiaries of social protection, little is known on their access to existing programmes. This study uses mixed methods to explore participation in disability‐targeted and non‐targeted social protection programmes in Viet Nam, particularly in the district of Cam Le. In this district, social assistance and health insurance coverage among people with disabilities was 53 per cent and 96 per cent respectively. However, few accessed employment‐linked social insurance and other disability‐targeted benefits (e.g. vocational training, transportation discounts). Factors affecting access included the accessibility of the application process, disability assessment procedures, awareness and the perceived utility of programmes, and attitudes on disability and social protection.     

Social protection systems and the future of work: Ensuring social security for digital platform workers

Digitalization is transforming societies and economies worldwide at an unprecedented scale and pace. In the wake of automation and digitalization, new forms of employment have been emerging in various occupations and sectors, such as the digital platform economy. The emergence of new forms of employment, such as work on digital platforms, requires that existing social protection systems adapt to the specific situation and needs of such workers, as to realize the human right to social security for all. Current social protection coverage for workers on digital crowdwork platforms reveals significant gaps in social security coverage. Where such coverage exists, it is often provided through the workers’ previous or additional jobs, or indirectly through their spouses or other family members. This raises questions about digital platforms free riding on the traditional economy with regard to the financing of social security. How can social protection systems adapt to changing forms of work to ensure full and effective coverage for workers in all forms of employment, including those in “new” forms of employment? How can workers in all types of employment, including those on digital platforms, be protected in an adequate and comprehensive way, combining contributory and non‐contributory mechanisms and based on equitable and sustainable financing mechanisms, so as to ensure adequate social protection to all?     

Global–regional interaction to extend access to social protection for migrant workers: Insights from ASEAN and MERCOSUR

Universal access to social protection for migrant workers is emerging as a problematic issue in the implementation of free movement regimes at a regional level. This article focuses on the concept of regional governance as a possible mechanism to address the unsolved challenges of social security regimes to extend coverage. To this end, the article looks at current legal developments in two regional projects (ASEAN and MERCOSUR) to identify a creative approach to strengthen the development of national floors of social protection. The interest of using these case studies lies in exploring whether the regional integration process can play a major role in the progressive extension of social protection rights to migrant workers by facilitating the adoption of social security agreements.     

Social health protection in Cambodia: Challenges of policy design and implementation

The Government of Cambodia is implementing ambitious reform initiatives to improve the country's social health protection system. In January 2018, it was announced that the Health Equity Fund (HEF), which is fully subsidized by a joint government‐donor initiative for the reimbursement of user fees for the poor at public health facilities, is to be expanded to some segments of informal workers belonging to associations, as well as to commune and village chiefs. Since 2017, the National Social Security Fund (NSSF) has provided social health insurance for formal economy workers in enterprises with eight employees or more. In January 2018, it was expanded to civil servants and all employees regardless of the size of the enterprise. However, this article highlights that the new ambitious reforms are not accompanied by careful planning as regards funding, service delivery, human resources and institutional design. This article therefore aims to examine key policy issues and challenges for Cambodia's ambitious reform of its social health protection system in terms of resource generation, population coverage, strategic purchasing and governance.     

The challenge of pension reform in Georgia: Non‐contributory pensions and elderly poverty

Georgia's national social security system offers almost universal non‐contributory basic pension coverage. The basic pension has, to date, proved effective in dealing with old‐age poverty. But Georgia's fiscal constraints and ageing population also highlight the importance of improving the pension system, in order to ensure its sustainability. This article presents policy reform choices, which suggest that, in Georgia, pension reform might include increasing the statutory retirement ages and reducing the generosity of benefits through means testing. The case of the Georgian non‐contributory basic pension might hold value for some low‐ and middle‐income countries that are considering the implementation of, or expanding coverage under, a non‐contributory pension programme.     

Including informal economy workers in contributory social protection: Current challenges in Latin America

Owing to a favourable economic situation and to national labour market and social protection policy reforms, Latin America has witnessed significant progress in social protection coverage. Some countries, however, have seen weaker progress, with stagnant coverage levels. Several factors underlie the extension of pensions and health care coverage and the formalization of the labour market: substantial improvements in the quality of employment, more flexible eligibility criteria for contributory coverage, and the strengthening of the supervisory and regulatory roles of the State. This article first addresses the link between social protection and informality in Latin America to show the relationship between informal labour markets, the lack of social protection and the scale of unpaid contributions. Also highlighted is regional progress in extending social protection as a result of labour market formalization. Countries in the region have used various policies to encourage formalization and these have also helped to reduce wage inequalities, since formalization has had especially beneficial effects on low‐income sectors. Finally, we discuss dichotomous views on social protection financing in the region that tend to place contributory and non‐contributory financing in opposition to one another but do so in favour of the latter, tend to support proposals for limited coverage, and which do not challenge the stratification of access to social protection. The move towards a convergence of benefits is deemed essential: strategies to universalize social protection in the region should not focus exclusively on increasing resources, but must address institutional change as a crucial part of the locus of innovation.     

Social protection and revenue collection: How they can jointly contribute to strengthening social cohesion

Social protection and revenue collection are often regarded as potential drivers of social cohesion. The article joins this debate, providing three main contributions. First, we carefully discuss the concept of social cohesion and endorse one specific definition. Second, we propose using the concept of the “fiscal contract” as the key theoretical lens to understand the often neglected potential joint effects of social protection and revenue collection policies on social cohesion. Third, we illustrate three main mechanisms through which these policies can have positive or negative impacts on the different components of social cohesion and highlight the relevance of these for policy-makers deliberations.     

How much do OECD countries spend on social protection and how redistributive are their tax/benefit systems?

The global economic crisis has reignited interest in social policy and public spending on different types of social benefits. Public social spending‐to‐GDP ratios are often used to consider the magnitude of welfare systems in international perspective, but such comparisons alone give an incomplete picture of social effort across countries. This article looks at these different factors, before briefly considering the redistributive nature of tax/benefit systems in different member countries of the Organisation for Economic Co‐operation and Development (OECD). The article also considers trends in social spending and compares spending in the late 2000s with the early 1990s when the previous economic crisis played out. The article ends by illustrating the profound effect the recent global economic crisis had on social spending trends across OECD countries.     

The old‐age pension law in Mexico: The promise of poverty in old age?

In 1997, Mexico replaced its main old‐age pension system with an individual capitalization system. In 2021, the first people subject to the new system will retire. Using a model that projects demographic and labour variables and using Monte Carlo simulations, the findings of this study show that in 2051 the percentage of men not having a pension will increase from 38 per cent to 59 per cent, and that of women from 44 per cent to 66 per cent. The replacement rate for the average Mexican worker will fall from 70 per cent to 30 per cent. The numbers of people in extreme poverty will increase by almost 2.8 million, representing 9.44 per cent of the population. Alternative scenarios are proposed that involve increasing the contribution rate and raising the retirement age.     

India's Mahatma Gandhi National Rural Employment Act: Assessing the quality of access and adequacy of benefits in MGNREGS public works

The extension of social protection to all has become a central policy objective, both nationally and internationally. A considerable number of middle‐ and low‐income countries have undertaken substantial efforts to extend social protection, while the international community reaffirmed its commitment to the extension of social protection through the adoption of the ILO Recommendation concerning National Floors of Social Protection, No. 202 (2012). This article reviews the legal provisions and the implementation of the Indian Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), legislated in 2005, and does so in the light of the more recent provisions of ILO Recommendation No. 202. Since its introduction ten years ago, MGNREGA has provided a source of income to rural workers, increased wage rates, achieved high female participation rates and created durable assets. India's local governance bodies, Panchayati Raj Institutions (PRI), have been empowered and involved in the processes of planning and monitoring. However, despite successes, there have been considerable shortcomings in implementation. This article highlights two central themes: first, the innovative policy framework of the Act, which brings together rights‐based entitlements, demand‐driven employment, and citizen‐centred monitoring. Second, it assesses the accessibility and adequacy of benefits in the implementation of MGNREGA. We conclude that MGNREGA offers potential for South‐South learning, both in terms of policy‐design and implementation.     

The relationship between different social expenditure schemes and poverty,inequality and economic growth

In this article, we study how social expenditure is related to poverty, income inequality and GDP growth. Our main contribution is to disentangle these relationships by the following social expenditure schemes: 1) “old age and survivors”, 2) “incapacity”, 3) “health”, 4) “family”, 5) “unemployment and active labour market policies” and 6) “housing and others”. For this purpose, we employ OLS and 2SLS regression models using a panel data set for 22 Member States of the European Union from 1990 until 2015. We find total public social expenditure to be negatively related to poverty and inequality, but not related to GDP growth. The results vary substantially between the different social expenditure schemes, which makes more accurate targeting possible.     

Social security contributions: Economic and public finance considerations

Social security contributions make up around a fourth of total tax revenue in OECD countries. However, there are concerns on the economic effects of high levies on labour. Recent studies suggest that at least a third of taxes on labour are shifted onto employers, leading to higher wage costs. We find substantial evidence in the literature that the nature of social security contributions matters. With a clear connection between contributions and rights, the employee will perceive this contribution as a price and not as a tax. As a consequence, these contributions will be less distortive in terms of labour supply, wage costs and private savings.     

Social protection assessment‐based national dialogue exercises: Cambodia,Indonesia, Thailand,Viet Nam

Between 2011 and 2013, the International Labour Organization, in collaboration with governments and several United Nations agencies working as part of the Social Protection Floor Initiative, conducted social protection assessment‐based national dialogue (ABND) exercises in Cambodia, Indonesia, Thailand and Viet Nam. The exercises were carried out in order to take stock of existing social protection realities in the respective countries, including social insurance, social assistance and anti‐poverty programmes. These inventories present a comprehensive picture of what elements of national social protection floors (SPFs) are in place, where “holes” in national floors exist, and provide a framework within which to propose recommendations for the further design and implementation of social protection provisions that guarantee at least the SPF to the entire population. This article describes the methodology for conducting ABND exercises, the situational analysis of the SPF in four countries, and the policy recommendations that were formulated for achieving basic health care and income security for children, the working‐age population and the elderly. The results of preliminary calculations of the cost of implementing proposed policy options are also outlined.     

Health care privatization processes in Europe: Theoretical justifications and empirical classification

This article analyses the health care system reform process in Europe based on the concept of privatization. This notion is understood from two perspectives. First, privatization may concern the health care financing or the provision of health services. Second, privatization can be “imposed” on individuals or be “internalized” and then introduced by individuals (patients and doctors). So we emphasize the diversity that privatization can assume. We classify privatization mechanisms used by different countries and identify which of the perspectives presented are more common in 14 European Union countries since the 1980s. The article shows that even if privatization processes are widespread, they assume different patterns in each country.     

Financing social security out of contributions: About origins,present discussions and prospects of a success story

In writing the overture to an issue on contribution financed social security one cannot but speak of Bismarck; it must also address Beveridge who saw contributions, although in their design and role clearly differently from Bismarck, as one core revenue tool to finance his vision. Beveridge attributed to the private financial sector a prominent role in securing people against the negative effects on income of shocks and crises, while Bismarck did not. Beveridge's concept, when first published, had, and still has today, the most attractive charm of rigorously satisfying peoples' striving for equitable and inclusive societal solutions. Bismarck's concept intrinsically offers income security only to those who contribute, while the level of protection depends on the level of contributions paid (with the exception of health insurance). In reality, both concepts, where implemented, had to face the realities of socio‐economic and political developments: Beveridge's vision was achieved in respect of access to health services where his proposal, in its predominantly tax‐financed version, has since turned into a worldwide blueprint for health schemes; in its other components, it was not resilient enough to achieve the intended standards and now is replete with means‐tested (poor relief) elements. Bismarck's scheme has proven its potential to achieve “universality”, not necessarily by theoretical design but as a matter of fact, i.e. covering people from cradle to grave (like Beveridgean schemes). With globalization, schemes of both origins have had to face massive neoliberal attacks over the last three decades. Which of the approaches is best able to survive must be left an open question: in the current worldwide context of rapid change, both have weak and strong points, and whether a symbiosis of the two offers the answer to future challenges remains to be seen.     

Expanding economic protection to the elderly in Latin America

This article addresses the reforms introduced in Latin American pension systems that had the aim of increasing coverage beyond formal‐sector workers. For this purpose, fourteen representative regional experiences are analysed using a taxonomy based on features of the cases examined in terms of design, implementation and results. The findings show that, although the reforms share the goal of expanding coverage, there are significant differences deriving from the context in which they were originally designed, their goals, and the capacity available to implement them. The results are not homogeneous, and it is possible to identify some aspects in which policy decisions can lead to better or worse results.