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Labour Markets: Security and Social Protection in the Informal Sector Complementary Comments by Johannes Jütting Development Centre, OECD, Paris ABCDE conference, Amsterdam, May 23, 2005. Outline. Relevance of the topic Additional perspective: health security 3) Conclusions and outlook.

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Outline

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  1. Labour Markets: Security and Social Protection in the Informal SectorComplementary CommentsbyJohannes Jütting Development Centre, OECD, ParisABCDE conference, Amsterdam, May 23, 2005

  2. Outline • Relevance of the topic • Additional perspective: health security 3) Conclusions and outlook

  3. 1) Relevance of the topic • Increasing Interest • OECD-DAC countries: POVNET’s work on pro-poor growth • World Bank: Social risk management approach • ILO: Global Campaign on Social Security and Coverage for All • New Insights • Risk and vulnerability as impediments to pro-poor growth • Emerging knowledge on pro’s and con’s of various social protection instruments • Evidence on determinants of participation in different social protection schemes

  4. 2) Additional perspective: health security • Health risks the most important risk for the poor in developing countries • Community financing schemes reaching out to the informal sector and rural areas: • From micro-finance to micro-insurance • Positive impact for members reported: financial protection, access to health care • Similar participation patterns and problems of exclusion

  5. Costs of Illness Direct Costs Indirect Costs Financial Costs Time Costs Sale of Livestock Sale of Asset Weak /Reduction in labour supply • - Reduced productive capacities • - Reduced credit worthiness • Less chance to hire out or hire in labour Low level of Productivity / income Source:Asfaw 2003

  6. 3) Conclusions and outlook • Emerging consensus on: • Crucial role of social protection in the informal sector for pro-poor growth/achieving the MDG’s • Labour and employment creation a core element • Limits of public provided social protection • “Optimal” public social protection policies, differ • According to the specific context (between countries and regions) • According to the type of risk covered • According to strength and weaknesses of non-state provided social protection

  7. 3) Conclusions and outlook • Conceptual framework needed • Impact of policies/instruments on labour market outcomes and social protection • Costs and benefits of different social protection instruments • Interaction effects, e.g. crowding out of private arrangements through public policies • Political economy considerations • Who will implement reforms? • What are the determinants for success? • Social dialogue and ownership

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