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Social security for all: Investing in people

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Social security reduces poverty by at least 50% in almost all OECD countries ... And yet: Social security is underutilized in national anti-poverty and ... – PowerPoint PPT presentation

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Title: Social security for all: Investing in people


1
Social security for all Investing in people
  • Presentation at UN DESA Forum Productive
    Employment and Decent Work
  • Michael Cichon
  • Social Security Department
  • New York, 8 May 2006

2
Structure of presentation
  • Point One Social security Definition,
    objective and problematique
  • Point Two Social securitys main challenges
  • Point Three The rationale for social security in
    development
  • Point Four Changing the development paradigm
  • Point Five By way of conclusion
    Accepting global responsibility for social
    security for all

3
Point One Definition
  • Definition social protection/social security
  • formal or informal income transfers in cash or
    in kind that ascertain access
  • - to health and social services and
  • - income security to cope with certain life
    risks that
  • could lead to a loss of income
    (i.e. social assistance, pensions, short-term
    cash benefits in case of sickness, maternity,
    unemployment, employment injury…)

4
Point One Objective
  • Objective of social security systems
    alleviate/or better abolish poverty and reduce
    social insecurity
  • The Decent Work connection Social
    protection/social security is one of basic
    pillars of decent work without social security
    neither work nor life in the formal and informal
    economy can be decent

5
Point One Problematique
  • Social security reduces poverty by at least 50
    in almost all OECD countries
  • Social security reduces income inequality by
    about 50 in many European countries
  • Social security universally accepted as human
    right (article 22, Universal Declaration)
  • And yet 80 of people live in social insecurity,
    20 in abject poverty
  • And yet Social security is underutilized in
    national anti-poverty and development strategies

6
Point One …present coverage
7
Point Two Challenge One The non-
affordability arguments Work and life cannot be
made decent through social security, because …
  • Loss in potential GDP due to equity efficiency
    trade-off
  • Social expenditure too expensive for developing
    countries
  • Ageing poses an unsolvable problem
  • Unmanageable expenditure explosions
  • - Competitive forces in globalization will
    limit fiscal space

8
The equity-efficiency trade-off Empirical
evidence in OECD
9
Assessing potential impact and costs of cash
transfers in Senegal and Tanzania Poverty
rates before and after cash transfers
10
Assessing potential impact and costs of cash
transfers in Senegal and Tanzania Cost of
benefit package as percentage of GDP
11
Affordability study, base scenario 2005-2035
projected benefit expenditure on old-age
/disability pension and child benefit ( of
GDP) But, in principle, both would be fiscally
affordable now and in the future
12
Preliminary results for Tanzania Expenditure
13
Preliminary results for Tanzania Financing
14
Ageing A catastrophe?
15
Ageing A catastrophe? Global dependency
rates
16
Non-manageable expenditure? Projected expenditure
in the EU…
17
Challenge Two Globalization, race to the
bottom and the new uncertainty
  • There is evidence for a reduction of expenditure
    and benefit levels
  • BUT There is no universal objective reason to
    assume that the fiscal space has to collapse
    completely However, a challenge remains

18
Race to the bottom The expected pension
replacement rates
19
No fiscal space?
20
No policy and fiscal space?
21
Point Three The rationale for social security in
development
  • (1) Extensive welfare states and productive
    economies co-exist The trade-off between
    equity and efficiency is wrong
  • (2) Some level of social security is affordable
    at any level of economic development
  • (3) Social security reduces poverty and
    inequality, facilitates LM adjustments,
    redistributes the proceeds of growth
  • ? Social security is thus an investment in
    people, states and the global community

22
Point Four Changing the development paradigm
towards progressive universalism
23
  • Let us start with
  • Basic health care for all
  • Child benefits conditioned on schooling
  • Self targeting social assistance
  • Universal benefits in old age, disability and
    loss of breadwinner
  • …facilitated through international action
    guidelines which could look as follows

24
Point Five Accepting global responsibility for
social security for all Three complementary
ways
  • Creating international standards to defend a
    global social floor
  • Accepting global responsibility for the fiscal
    space for social transfers (PRSP, debt relief,
    ODA etc.)
  • Supporting national administrations in improved
    resource allocation and mobilization mechanisms
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