Download Outline of envisaged TC activities in the field of social

ILO basic social protection
costing models and
policy implications
ODI International Conference on Financing Social
Protection in LICs: Finding the Common Ground
London, 26-27 May 2011
Christina Behrendt,
ILO Social Security Department
How it all began...
Results of the first ILO costing model (2005-06)
Assumptions:
6.0
Old-age pensions
Child benefits
5.0
Health care
Social assistance/employment scheme
Administrative costs
3.0
2.0
1.0
Viet Nam
Pakistan
Nepal
India
Bangladesh
United Rep.
Tanzania
Senegal
Kenya
Guinea
Ethiopia
Cameroon
0.0
Burkina Faso
Per cent of GDP
4.0
Old age pensions: all men
and women 65+, 30% of GDP
per capita, max US$1 PPP.
Child benefits: children 0-14,
benefits for max. 2 children
per mother, 15% of GDP per
capita, max US$0.5 PPP.
Health care: cost of 300
medical staff per 100,000
population plus overhead of
67% of wage cost.
Social assistance/
employment scheme: 10% of
population for 100 days of
employment/year, 30% of
GDP per capita, max US$1
PPP.
Administrative cost (cash
benefits): 15% of benefit
expenditure.
ILO, 2008: Can Low-income Countries Afford Basic Social Security?, Social Security Policy Briefings 3
(Geneva: ILO), http://www.ilo.org/public/english/protection/secsoc/downloads/policy/policy3e.pdf
ILO modelling results and policy context:
Some examples
Modelling results
and related publications
Advocacy and policy documents
First results for 7 African and 5 Asian
countries (ILO Discussion Papers, 2005/6)
Commission for
Africa Report (2005)
Can low-income countries afford basic social
protection? (ILO Policy Brief, 2008)
Building Decent Societies
(P. Townsend (ed.), 2009)
Extending Social Security to All
(ILO, 2010)
Social Security for Social Justice and a Fair
Globalization (ILO, 2011)
Full references: see last slide.
Livingstone Call for Action
(AU et al., 2006)
Promoting Pro-poor Growth
(OECD DAC, 2006)
Social Policy Framework for Africa (2008)
Social Protection Floor
(UN joint crisis response initiative, 2009)
Global Jobs Pact (ILO and UN, 2009)
European Report on Development: Social
protection for inclusive development (2010)
The emergence and context of
ILO basic social protection costing models
GENERIC
First ILO costing
model (2005)
• 7 African and
5 Asian low income
countries
• Developed in
cooperation with
DfID
Social
Budgets
SPERs*
Actuarial
models
COUNTRY-SPECIFIC
* SPER = Social Protection Expenditure and Performance Review
Joint
ILO/UNICEF
costing tool
Rapid
Assessment
Protocol
(RAP)
Social Protection Floor
Quantitative Tools
COSTING TOOL
RAPID ASSESSMENT PROTOCOL
1. Fixed and pre-defined format
1. Flexible format
2. Time demanding
3. The construction of the model
goes hand in hand with a dialogue
process involving national
authorities and other actors
dealing with social protection
4. Previous knowledge on Excel
modelling, demographics,
macroeconomics, government
finances, benefit design or
poverty impact is required.
2. Not time demanding
3. Features: pre-defined scenarios,
types of benefits; pre-defined
poverty impact module
4. No previous knowledge on Excel
modelling, demographics,
macroeconomics, government
finances, benefit design or
poverty impact is necessary .
4
SPF Quantitative Tools:
Model uses and trade-offs
COSTING TOOL
Quantitative technical background
not absolutely necessary
Early stages,
prior to detailed consultations
Useful for testing standard
predefined benefit designs
Rapid results
RAPID ASSESSMENT PROTOCOL
WHO?
WHEN?
Quantitative technical background
indispensable
Early and intermediate stages
of the discussion
WHAT FOR?
Useful for
(a) testing different benefit designs
(tailor made) and policy options in
national dialogue process
(b) Fiscal space analysis
RESULTS
More robust results
Rapid Assessment Protocol
README
POP
AR
INFORMATION
INSTRUCTION
S
POPULATION
BY AGE AND
SEX
ACTIVITY
RATES BY
AGE AND
SEX
One Excel
Workbook
EAP
ECO
GGO (SQ)
ECON.
ACTIVE
POPULATION
MACROECONOMIC
FRAMEWORK
GENERAL
GOVMNT.
OPS. SQ
GGO
(BS)
GENERAL
GOVMNT.
OPS. BS
BEN (n)
BENEFIT –
MODELING
BEN (...)
EXERCISE
BENEFIT –
MODELING
BEN (2)
EXERCISE
BENEFIT –
MODELING
BEN (1)
BENEFITEXERCISE
–
MODELING
EXERCISE
BENEFIT COST ESTIMATES
• Benefit parameters
• Reference, target and
covered population
•Total costs
Example: Analysis of cost to close the
SPF Gap in Viet Nam
3.0
3. Working age
income security
(scenario 1 - high
cost )
0.7
0.6
0.6
0.80
0.79
0.77
2020
2019
2018
2017
2016
2.b Child benefit
(scenario 2bTargeted for ALL
poor children cash
and kind )
The impact of filling the SPF gap on the General Government deficit
as a percentage of GDP
1b. Old age
universal pension
(65+)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0,0
As a percentage of GDP
0.7
0.82
0.79
0.8
0.85
0.82
0.81
0.89
0.91
0.7
0.88
2015
2014
2013
0.56
0.5
0.37
0.0
2012
0.5
2011 0.170.2 0.35
0.6
1.0
0.6
0.71
1.5
0.92
0.93
2.0
1.00
1.02
2.5
2010
Total child benefit cost as percentage of GDP
Total additional costs to fill the gaps toward the SPF components
as a percentage of GDP
-1,0
-2,0
-0,2
-3,3
0,0
-1,2
-2,5
-3,0 -3,0 -3,0 -3,0 -3,0 -3,0
-3,9 -3,8 -3,6 -3,3
-3,0
-4,0
-5,0
-6,4
-9,0
-0,9 -0,8 -0,8 -0,8 -0,8 -0,8
-0,4 -0,6 -0,9 -0,7
-0,2
-0,2
-0,8 -0,7 -0,7 -0,6 -0,6
-0,5
-0,6
-0,4
-0,6
-0,7 -0,9
-0,9 -0,8 -0,8 -0,8
-1,0 -1,0 -0,9
-6,0
-7,0
-8,0
-9,0
Source: Compatibility analysis of the national Social
Protection Strategy and the UN Social Protection Floor
Initiative: Costing and financial projections to implement
social protection policies 2011-2020 (Draft), ILO, Geneva.
-10,0
3. Working age income security
2.b Child benefit (targeted for ALL poor children | cash and kind )
1b. Old age universal pension (65+)
General government fiscal balance (IMF) - STATUS QUO
7
Example: Assessing potential poverty impacts
(poverty gap in % of GDP) in Viet Nam
Working age
12,000,000,000
0.80
Elderly
0.70
Children 11-15
10,000,000,000
Children 6-10
0.60
Children <5
8,000,000,000
Total poverty gap as a percentage of GDP
0.50
0.40
6,000,000,000
0.30
4,000,000,000
0.20
2,000,000,000
0.10
0.00
Initial situation |
Poverty rate
BEFORE benefit
ELD2 | Poverty post CHILD 1 | Poverty
CHILD2 | Poverty
WA1 | Poverty post
Poverty post ALL
universal pension to post means-tested post means-tested
100 days
three benefits (ALL
all (Same as scenario children (all children children (limited to 2
employment
Elderly ELD2 + ALL
1 + 50 % poverty line
in poor HH)
per poor HH)
guaranteed and children per poor HH
for contributory
disability benefit
CHILD1 + WA)
scheme pensionners)
Poverty post ALL
three benefits (ALL
Elderly poverty line
ELD2 + limited to 2
children per poor HH
CHILD2 + WA)
Source: Compatibility analysis of the national Social Protection Strategy and the UN Social Protection Floor Initiative:
Costing and financial projections to implement social protection policies 2011-2020 (Draft), ILO, Geneva.
Total poverty gap as a percentage of GDP
Total poverty gap BEFORE and POST benefits (Millions VND)
Total poverty gap (Millions VND) and composition
8
Where do we stand today?
Ongoing Social Protection Floor
costing assessments and
national dialogue processes:
Important features
●
Nationally dialogue process ensuring
national ownership
●
Benin
●
●
El Salvador
●
Haiti
Detailed and comprehensive
assessment including existing
schemes
●
Mozambique
●
Priority-setting and sequencing for
gradual implementation
●
Nepal
●
●
Togo
Strengthening national institutional
capacities
●
Viet Nam
●
Fiscal space: detailed assessment of
status quo and options for extension
as necessary
●
Collaboration with IMF, UNICEF and
other partners
9
Moving forward...
Some policy implications and challenges
1. Financing of social security, particularly with respect to national
Social Protection Floors
●
Identifying and extending fiscal space within current budgets
(collaboration with IMF)
●
Challenge: Identifying possible options for more effective collection of
taxes and other sources of revenue
2. Effective policy dialogues at national level
●
Identification of priority benefits, priority target groups and sequencing
in gradual implementation processes
●
Dynamics of national policy dialogues
●
Including estimates on direct impact on poverty
3. Strengthening national institutional capacities
●
Starting from existing institutional frameworks where possible
●
Building up sustainable institutional capacities and ensuring their
effectiveness
●
Importance of monitoring and policy planning
10
Further references
● ILO, 2008: Can low-income countries afford basic social
security?, Social Security Policy Briefings 3 (Geneva:
ILO), http://www.ilo.org/public/english/protection/
secsoc/downloads/policy/policy3e.pdf
● Townsend, P. ed., 2009: Building decent societies:
Rethinking the role of social security in state building
(London: Palgrave), http://www.palgrave.com/
products/title.aspx?pid=370307n
● Pal, K. et al., 2005: Can low income countries afford
basic social protection? First results of a modelling
exercise, Issues in Social Protection Discussion Paper
(Geneva: ILO),
http://www.ilo.org/public/english/protection/secsoc/
downloads/policy/1023sp1.pdf
● ILO, 2010: Extending social security to all. A guide through
challenges and options (Geneva: ILO),
http://www.socialsecurityextension.
org/gimi/gess/RessFileDownload.do?ressourceId=16152
● Mizunoya, S. et al., 2006: Can low income countries
afford basic social protection? First results of a
modelling exercise for five Asian countries, Issues in
Social Protection Discussion Paper (Geneva: ILO),
http://www3.ilo.org/public/english/protection/secsoc
/downloads/1527sp1.pdf
● Gassmann, F. and Behrendt, C., 2006: Cash benefits in
low-income countries: Simulating the effects on
poverty reduction for Senegal and Tanzania, Issues in
Social Protection Discussion Paper (Geneva: ILO),
http://www.socialsecurityextension.org/gimi
/gess/RessFileDownload.do?ressourceId=6813
● ILO, 2011: Growth, employment and decent work in least
developed countries (Geneva: ILO),
http://www.ilo.org/wcmsp5/groups/ public/---ed_emp/--emp_elm/documents/publication/ wcms_153868.pdf
● UNDP; Special Unit for South-South Cooperation, and ILO,
2011: Sharing Innovative Experiences: Successful social
protection floor experiences (New York and Geneva: UNDP,
Special Unit for South-South Cooperation and ILO),
http://www.socialsecurityextension.org/
gimi/gess/RessFileDownload.do?ressourceId=20840
● ILO, 2011: Social security for social justice and a fair
globalization (Geneva: ILO),
http://www.ilo.org/wcmsp5/groups/public/---ed_norm/--relconf/documents/meetingdocument/ wcms_152819.pdf
More info: [email protected]