Employment and social protection for inclusive growth | Selim Jahan
29 Aug 2013
We live in times that seem to be defined by shocks and crises, and these have the potential to slow down, or even reverse, impressive achievements in human development over the years.
There is, in fact, evidence that certain human development indicators have suffered setbacks in the context of a crisis. For example, as a result of the Asian crisis of 1997, the poverty rate in the Republic of Korea went from 2.6 percent in 1997 to 7.3 per cent in 1998. Similarly, the poverty rate in Indonesia almost doubled in the same period.
Social protection can be an effective tool for helping people, households and economies to cope with vulnerabilities arising from economic shocks. Countries that had social protection programmes in place were better able to weather the recent economic downturn, and some economies were even able to recover faster. Brazil, for example, was one of the last economies to be hit by the recent crisis and one of the first to begin recovering from it. An important reason was an increase in cash transfers to families, which helped offset the negative effects of the crisis.
But social protection can only go so far unless it is linked with other aspects of economic policies. The relationship between social protection and employment is important since jobs that provide basic protections are fundamental for helping families find their way out of poverty.
Employment and social protection can interact in several ways:
• Impacting people’s ability to invest in their health and education and to aspire to more and better employment opportunities, as in the case of conditional cash transfers.
• Improving the availability and conditions of jobs, as in the case of the National Rural Employment Guarantee Programme (NREGA) in India.
• Supporting income-generating activities, as in the combination of input subsidies and food and cash transfers for small-farm holders in Malawi.
• Providing protection for large numbers of informal workers, as in Mexico, or providing protection for migrants, as in Tajikistan.
But the way these two areas interact depends on how programmes are designed and linked; ideally they should not generate unintended consequences and can actually build on each other to boost their effect on wellbeing and resilience.