Download Employment/public work programs

Welfare Programs, Structural Poverty, and
Shocks: A Categorization of Programs in
the Region
Cristian Aedo
Third Meeting of the Social Policy Monitoring
Network
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Presentation Index
1.
Objectives
of
the
Programs:
Employment/public works programs
CCTs
and
2.
How fast can you implement and/or expand these
program in the presence of an aggregate shock
3.
Complementarities between these programs in forming a
Social Safety Net
4.
Programs´ Challenges
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1. Objectives of the Programs
• In social safety nets in LAC we find programs that address
structural determinants of poverty and programs which
address the need to alleviate the social and economics
impacts of the economic crisis and fiscal adjustment
processes
• Conditional Cash Transfer (CCT) programs are examples of
the first type. They focus on the structurally poor, that is on
people/families who lack the skills or productive assets to
live above the poverty line
• The Employment/public works programs are examples of the
second type, and they focus on people/families who are
throne into poverty or suffer a large decline in income
because of economic crisis (aggregate shock)
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• The standard CCT program is based on the premise that
the main reason behind the chronic poverty situation which
affects the most vulnerable is an insufficient investment in
human capital
• In order to cope with their specific situation, households in
extreme poverty usually use strategies which have
permanent effects not only on their own human capital but
also on the human capital of their children. These decisions
affect the labor productivity of these future worker, thus
perpetuating the poverty situation and imposing costs to
society
• A transfer or monetary incentive (demand subsidy) is
provided to those eligible who comply with the conditions
set by the programs, to maintain or increase their long term
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investment in human capital
• With the subsidy families increase their current income
helping them in the short run to support minimum levels of
consumption
• These programs, which use demand subsidies, constitutes a
clear departure from traditional supply side interventions,
such as investments in schools, primary health care units
and in other social services
• Some programs include supply actions as well to strength
the supply of educational and health services, but even
pure demand programs put pressure to respond to the
increased demand they create
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Programa
Bolsa Escola, Brasil
PETI, Brasil
Beneficios Ofrecidos por el Programa
Subsidio Mensual
Condicionantes
Beca escolar a niños pobres entre 6-15
años que asisten a la escuela
R$15-R$45 (US$6-19) por
familia
85% de asistencia escolar en período de 3 meses
Transferencia de Ingreso
Programa post-escuela
Varía entre estados entre
$R25-R$39 (US$11-17) por
niño mes
80% de asistencia escolar en período de 3 meses y
participación en el programa post-escuela
(jornada ampliada)
Bolsa Alimentacao,
Brasil
Beca de Salud
Familias en Acción,
Colombia
Apoyo nutricional a las familias con niños
menores de 7 años
Subsidio para incentivar la asistencia
escolar y el rendimiento de los niños
Primaria: Col$14,000
(US$6) por niño mes
Secundaria: Col$28,000
(US$12) por niño mes
Visitas regulares a centros de salud para
monitoreo de crecimiento de niños
Al menos 80% de asistencia a la escuela en
período de 2 meses
PRAF II, Honduras
Incentivos a la demanda (voucher): bono
escolar, bono nutricional y de salud
Entrenamiento en nutrición para madres
Incentivos a la oferta para escuelas
primarias y para centros de salud
Voucher a la educación:
L$828 (US$58) por niño
por año.
Incentivo a la oferta:
L$57,940 (US$4,000) por
escuela por año
Inscripción a la escuela y máximo de 7 días de
ausentismo en un período de 3 meses
Cumplir con la frecuencia regular de visitas a
centros de salud
-
Cumplir calendario de visitas a centro de salud y
cumplir con el programa de vacunaciones
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Programa
PROGRESA
Oportunidades,
México
Red de Protección
Social, Nicaragua
Beneficios Ofrecidos por el Programa
Subsidio Mensual
Condicionantes
Becas educativa para niños y jóvenes que
cursan entre 3ero de primaria y 3er grado
de educación media
Apoyo para materiales de la escuela
Refuerzo de la oferta y calidad de
servicios de educación
Apoyos monetarios para mejorar la
alimentación familiar
Paquete básico de atención de salud
Suplementos alimenticios para todos los
niños entre 4 meses y 2 años, los menores
de 5 años que presentan desnutrición y
para mujeres embarazadas o que están
lactando
Educación en nutrición y salud
Apoyo a la oferta de servicios de salud
Primaria: Varía por grado
US$8-17 por niño por mes +
US$ 11 por niño por año para
materiales
Secundaria: varía por grado y
sexo US$25-32 por niño por
mes + US$20 por niño por año
para materiales
Para los beneficios educativos: cumplir con
una asistencia de más del 85% a clases
Para los beneficios de apoyo monetario y de
alimentación las familias deben cumplir con la
responsabilidad de acudir a sus citas
programadas en los servicios de salud
Bono alimentario destinado a la compra
de alimentos necesarios para mejorar la
nutrición de la familia
Bono educativo para hogares con niños
entre 6-13 años y que cursen entre 1ero a
4to grado.
Cada dos meses se le entrega a la titular
US$ 0.7 por niño (a) matriculado, para
que lo entregue a la escuela.
Beca: C$240 (US$ 17) cada 2
meses por familia
Apoyo de materiales para la
escuela: C$275 (US$20)
Incentivos a la oferta: C$10
(US$0,7) por estudiante cada
2 meses
Los titulares con niños de 0-5 años deben
completar un plan de salud preventivo y
acudir a cursos de capacitación en salud y
nutrición
Ausentismo injustificado menor a 6 días en un
período de 2 meses y promoción al siguiente
grado
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• Next we come to these other type of programs which are less
structured
and
less
theoretically
based.
The
Employment/public works programs aim is to redistribute
income and resources to current unemployed by providing
jobs during economic crisis
• As a difference with the CCT programs which are targeted to
the structurally poor, these programs can be use to target
different types of beneficiaries:
 Temporary unemployed/inactive skilled workers
 Temporary unemployed/inactive unskilled workers
• The structurally poor will be natural beneficiaries of these
programs, but also people close to the poverty line
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 Empleo en Acción (Colombia): Implemented in 2000 to
alleviate the impacts that the economic crisis and fiscal
adjustment have had on the poorest by providing short time
employment, to unskilled workers from poor households, for
construction or maintenance of community infrastructure in
low income urban areas
 Jefes y Jefas de Hogares (Argentina): Implemented in 2002
as a response to the economic crisis. It provided a universal
subsidy (Ar$ 150 /month) to unemployed head of the
households with dependents. Because of targeting problems,
later a working conditioning was implemented in order to be
eligible to receive the subsidy (20 hours in community work,
labor training activities, etc.)
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• These programs are oriented to smooth out consumption and
are short time programs. Hence, they don't usually have a
long term impact (or concern) on productivity
• It is hard to distinguish between Social Investment Funds and
programs such as Empleo en Acción
In my mind the primary objective for Social Investment
Funds was the investment/development project, with
employment generation being secondary
With programs like Empleo en Acción the opposite is true,
generating employment is the primary objective with the
infrastructure projects being secondary
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• These programs might coexist with an unemployment
insurance system and social security contributions (social
insurance mechanism) which covers the formal workers
• The extensive informal sectors, which are “endemic” to
some LAC, restrict the coverage of such a system to some
group of workers (formal sector) as informal workers may
choose not to contribute because they are income
constrained and/or they are close to the survival threshold
• This increases the vulnerability of the poorest and worsens
even further the prospects for human capital accumulation
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2. How fast can you implement and/or expand these
programs in the presence of an aggregate shock?
• A standard CCT program can't expand the number of eligible
families easily in times of crisis because they are intensive in
information on the beneficiaries
• They use either Mean Tests or Score Tests to check
eligibility, which are based on survey information, census
data or socioeconomic characterization profiles (“fichas”),
which are difficult and costly to obtain for the new eligible
families
• Some programs check eligibility every 3 years because it is
costly and because they want to avoid gaming (people
change behavior to become eligible), which is an additional
reason for not considering idiosyncratic risks in the design 12
• The expansion of the Programs require, in addition to
funding, the operative capacity at the level of program
execution and the monitoring capacity to accommodate the
expansion of the program. This highlights the importance of
having a good information system
• Given the new economic situation, new needs may arise. Do
countries have the institutional and financial capacity to
redirect these programs or to create new programs? Are
programs flexible?
• Employment programs/Public Works Programs may be easier
to expand in times of crisis as the eligibility requirements are
less strict. On the other, the pressing needs they address and
the quick response which is needed, may imply some
difficulties in targeting the “right” beneficiaries
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• Once in place, vested interests make them harder to get rid of
these programs
• Empleo en Acción has apparently been chopped although the
preliminary evaluation results were good. From the beginning
it was set as a counter-cyclical program, and the funding was
assured for the expected duration of the economic crisis
• Is it a good indication? You can stop a Program which can
start up again easily
• Or is it a bad indication? A good Program was stopped midstream
• Both programs present the challenge of designing a proper exit
scheme that guarantees a smooth transition toward an
independent status, which helps individuals and families to
remain self sufficient and above the poverty line
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3. Complementarities of these programs in
forming a Social Safety Net
• The two types of Programs have distinct objectives and
therefore target different groups of beneficiaries, which is
helpful:
 You can cover more population during economic crisis
 You can fill the gaps by addressing different population
needs specially when CCT subsidies are very low
• They can also overlap for the structurally poor and hence
these programs can work together in a safety net
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• Even though the employment programs don't assure the
achievement of the goals of the CCT program, it may reduce
the risks that they are not obtained when beneficiaries
overlap
• The employment program may protect the labor income of
the head of the household, making it more likely that children
continue their accumulation of human capital through CCT
programs and hence obtaining positive impacts from future
gains in labor productivity
• Both programs will be fulfilling their goals of assisting those
in need in the short run period and alleviating poverty in the
long-term, thereby implying the programs complements each
other instead of being substitutes. Both programs can
therefore exist in an effective social safety net
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4. Challenges: CCT programs
• Given that the effectiveness of the CCT programs is
conditioned by supply factors they should include supply
incentives/actions. Public resources might be misspent
otherwise
• Do they have a permanent impact? Are they achieving
learning goals, besides greater school attendance and
decreases in dropping rates? Are people leaving the poverty
condition in the medium and long run?
• Is there a more cost effective way of increasing human capital
among the poorest?
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4. Challenges: Employment/public work
programs
• In crisis time, a rapidly increasing program might fail to be
well targeted. Can you target?
• Even though it is not its explicit purpose:
 Do the projects bring about increases in labor
productivity?
 At the individual level, do they increase the likelihood
of employment in the formal sector? Do they have a
long term impact on consumption and labor income?
 Can they be linked to training or other programs which
increases human capital?
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4. Common Challenge: Funding
• These programs impose heavy funding requirements for
the economy:
 Oportunidades 0,32% of GDP
 Bolsa Escola 0,13% of GDP
 Familias en Acción 0,12% of GDP
• They should be funded with current fiscal resources. Chile
and Brazil have done so. In other cases there is a higher
dependency on international loans, which compromises the
continuity of the programs
• Saving funds for financing social safety nets could be
evaluated as a possible mechanism
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To Conclude:
• An effective social safety net should include programs which
protect vulnerable households during crisis and programs that
provide incentives for human capital build up among the most
vulnerable
• This means to include:
 Programs which help current workers to cope with
fluctuations in income and consumption
 Programs that create incentives for human capital
investments
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