Social assistance and inclusive growth

The expansion of social assistance in low- and middle-income countries raises important issues for inclusive growth. Labour is by far the principal asset of low-income groups. Changes in the quantity, quality, and allocation of labour associated with social assistance will impact on the productive capacity of low-income groups and therefore on inclusive growth. The article re-assesses the findings reported by impact evaluations of social assistance in low- and middle-income countries to address this issue. Most studies have tested for potentially adverse labour supply incentive effects from transfers but have failed to find supportive evidence. The article highlights findings from this literature on the effects of social assistance on human capital accumulation and labour reallocation. They point to the conclusion that well-designed and well-implemented social assistance contributes to inclusive growth.     

Social security: Indispensable solidarity

Social security must be considered not as an economic burden, but as a collection of mechanisms for collective solidarity based on the principle of income redistribution. The economic and social transformations that the various regions of the world are going through, in particular the globalization of the economy, are making social security increasingly necessary. Instead of yielding to proposals for the privatization of schemes — a formula that is less efficient and more expensive — we should be protecting and improving social security; developing it in those countries where its position is still weak; and stressing that, while its objectives are humane and social, it brings economic benefits too.     

Social security and dependence

There is increasing concern that social security creates dependence. The contingencies of most interest are unemployment, lone parenthood and disability. The relationships between each of these contingencies and the level of social security benefits are analysed cross-nationally; in no case is there a systematic relationship. The paper then examines other factors that determine dependence on social security.     

Social security reforms in China: issues and prospects

The phenomenal success of China's market-oriented economic reforms since the 1980s has rendered the traditional employment-based social security system increasingly inadequate and inefficient. For decades, the Chinese government has been trying to develop a more pluralistic, effective and affordable social security system which will be compatible with both a thriving market economy and a flagging socialist political structure. While the emerging system is still struggling with a variety of operational problems, the entry of China into the WTO is looming as a formidable challenge to this social security system. This presentation outlines the recent reforms of the social security system undertaken by the Chinese government, and assesses the effectiveness of the results in meeting the challenge. Here, social security reforms focus on the retirement and unemployment insurance schemes and the social assistance program.     

Social security coverage extension: A review of recent evidence

This article reports the findings of 13 studies undertaken as part of the International Social Security Association (ISSA) project on “Examining the existing knowledge on coverage extension”. It reviews recent evidence that highlights how cash benefits and health‐care coverage, financed on the basis of contributions or tax revenue or both, can be extended and maintained in low‐, middle‐ and high‐income countries. The article also highlights a number of priority areas and issues for coverage extension, including realizing improved protection for informal‐economy and migrant workers.     

Social assistance in Shanghai: Dynamics between social protection and informal employment

China's social assistance programme (dibao 低保) was introduced in Shanghai in 1993 and gradually extended to cover all urban areas by 1998. Due to massive economic restructuring, starting in the early 1990s, many urban dibao recipients were laid‐off, that is, state‐owned enterprise (SOE) employees. Shanghai was the epicentre of SOE reform, and the dibao system was primarily introduced to provide a safety net for laid‐off workers. In 2010, approximately 3 per cent of urban, permanent residents were on dibao, and 72 per cent of its recipients were working‐age adults. We conducted longitudinal qualitative interviews five times over 2 years with 40 dibao families that contained adults of working age in a Shanghai district. The current study demonstrates how they managed their employment, income and the dibao system. Findings suggested that, for various reasons, there was insufficient motivation for recipients to gain reemployment and leave dibao. Furthermore, local cadres, which were responsible for assessing and recommending dibao applicants to the district government, likely just assumed the incomes of adults with working capabilities.     

Social security in the USSR

Social security systems reflect the political and economic realities of their country. The history of the Soviet social security system lends support to this thesis. Its basic features were drawn during Stalin's forceful drive towards heavy industrialization and they remained pretty much the same over the years despite many changes, often of significant detail. It was a system financed by the state, providing earnings-related benefits to workers who fulfilled their work obligations and favouring those in the Communist Party, government and industry whose contribution was deemed to be most useful to the state and the economy. The absence of political freedom meant that open criticism of existing provisions was very difficult, while the emphasis of successive governments on defence and space exploration inevitably meant that state funds for social security suffered and with them the level and range of benefits. The collapse of the Soviet Union has resulted in widespread hardship among those relying on benefits and has created a situation where new social security systems are needed to reflect the new political and economic realities.     

Social assistance in a shrinking Canadian welfare state

Social assistance, variously known as "welfare" or "the dole", stands at the very base of the modern welfare state and must remain when all other societal, community and family supports have vanished. This paper examines social assistance in Canada, primarily through the Canada Assistance Plan (CAP), the key legislation operative in the area of divided jurisdiction between the central and provincial governments. It considers how CAP has fared in the midst of a substantial weakening of the country's total social support system over the past 15 years, attempts to explain the programme's relatively protected position, and speculates briefly on the future of social assistance.     

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.