Chris de Neubourg Maastricht University
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2 MSc. in Social Protection Financing MSc. in Social Protection Policy MSc. in Public Policy and Human Development MSc. in Public Health PhD. in Social Policy Analysis
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4 SOCIAL SAFETY NETS IN EUROPE AND THE OECD
5 Income of average person and average person in tenth decile: international comparison 1999 Average person relative to US person (PPP) Average overall GDP per capita Average D10 as % of median income country (PPP) Average D10 as % of median income USA (PPP) Sweden United Kingdom Finland Australia France Germany Netherlands Denmark Belgium Canada Norway Switzerland United States Difference between columns 3 and 4 due to difference in the equivalence scale used; for details see source. Source: compiled from Smeeding and Rainwater, 2002.
6 Table 1.1 Laeken Common Indicators of Social Inclusion, Riskofpoverty (40% med.) Riskofpoverty (50% med.) Riskofpoverty (60% med.) Riskofpoverty (70% med.) Persistent risk-ofpoverty (60% med.)(1) Persistent risk-ofpoverty (50% med.) Relative risk-ofpoverty gap(2) Belgium France Germany Italy Netherlands Portugal Spain Sweden United Kingdom United States (3) 17,5 Notes: (1) Persistent risk-of poverty rate: The share of persons with an income below the risk-ofpoverty threshold (% of median income) in the current year and in at least two of the preceding three years. (2) Relative risk-of-poverty gap: Difference between the median income of persons below the at-risk-of-poverty threshold and the at-risk-of-poverty threshold, expressed as a percentage of the at-risk-of-poverty threshold. (3) Figure from the United States from Oxley et al. (1999), refers to year Source: Eurostat (2004).
7 Table 1.5 Percentage share of children living in households earning less than 50% of median income Country Year Child poverty rate Belgium ,1 Canada ,2 France ,1 Germany ,6 Italy ,8 Netherlands ,1 Sweden ,7 United Kingdom ,6 United States ,2 Source: Förster (2000)
8 Differences due to Social protection policy and especially social safety net policy Economic factors: Level of development/economic growth Differences in population Political orientation/preferences
9 And Social Safety Net Policy matters Simulated poverty rates in the European Union in 2005 and 2010 using a constant poverty line 1 ; 2 percent income growth; all incomes and excluding transfer income 2005 all incomes grow 2 % 2010 all incomes grow 2 % 2005 all incomes grow 2 % except transfers 2010 all incomes grow 2 % except transfers all households all individuals children non-aged adults aged persons Source: Cantillon and Van den Bosch, 2000, pp. 15 and 16.
10 Table 2.1 Government expenditure on Social Programmes in 1998, as percentage of GDP. Country Total Old age a Family b Unemployment c Health Sickness/ Occ. Injury and Disease Housing Other d Belgium 24,54 11,30 2,22 3,84 6,13 0,73 0,00 0,32 France 28,82 13,71 2,69 3,10 7,27 0,75 0,92 0,40 Germany 27,29 12,75 2,73 2,58 7,80 0,66 0,18 0,61 Italy 25,07 16,60 0,88 1,38 5,51 0,71 0,01 0,00 The Netherlands 23,90 10,73 1,21 3,92 5,97 1,02 0,44 0,62 Portugal 18,21 9,83 0,98 1,55 5,14 0,46 0,00 0,25 Spain 19,71 10,60 0,40 2,20 5,36 0,94 0,07 0,14 Sweden 30,98 13,96 3,31 3,89 6,64 1,45 0,81 0,93 United Kingdom 24,70 14,23 2,22 0,63 5,62 0,19 1,61 0,21 United States 14,59 6,95 0,51 0,43 5,86 0,29 0,00 0,56 Notes: a : includes cash and in kind services for old-age, disability and survivors b: includes cash benefits and services in kind c: Unemployment benefits and Active labour market policies d: Expenditure on other contingencies (either in cash or in kind), including benefits to low-income households. Source: Own calculation from OECD Social Expenditure Database Edition 2001.
11 Table 2.3 Targeted benefits expenditure as a proportion of total social security expenditure, Country Proportion Belgium 3,0 France 6,4 Italy 9,1 Netherlands 10,9 Portugal 3,8 Spain 8,4 Sweden 6,7 United Kingdom 33,0 United States 39,8 Australia 90,3 Austria 6,7 Canada 18,9 Japan 3,7 New Zealand 100,0 Norway 4,8 Source: Gilbert (2002), p.138.
12 Table 2.11 Social transfers as a percentage of households disposable income (1994) All social transfers Pensions All social transfers excluding pensions Sickness and invalidity benefits Family benefits Unemploym ent benefits Other benefits Belgium 32,7 18,9 13,8 3,0 6,6 3,8 0,4 France 28,2 18,4 9,8 1,7 4,0 2,1 2,0 Germany* 26,2 19,0 7,2 n/a n/a 2,4 4,8 Italy 26,5 23,4 3,1 1,8 0,4 0,7 0,3 Portugal 20,5 15,3 5,2 1,8 1,7 1,5 0,3 Netherlands 27,8 14,9 12,9 4,4 3,0 3,0 2,4 Spain 25,8 17,5 8,3 3,9 0,2 3,7 0,5 United Kingdom 23,9 11,7 12,2 3,0 3,6 0,5 5,0 Note: * "Other benefits" in Germany also includes "Sickness and invalidity benefits" and "Family Benefits". Source: Heady et al. (2001).
13 Table 2.16 Impact of particular social transfers on aggregate poverty (1994, Foster-Greer- Thorbecke index, a = 2) Pensions Sickness and invalidity benefits Family benefits Unemployment benefits Other benefits A B A B A B A B A B Belgium 85,0 5,9 37,9 1,4 46,0 4,8 48,0 3,3 8,5 0,7 France 88,0 6,4 27,2 1,1 44,9 4,1 31,6 1,7 43,2 4,7 Germany* 83,7 4,4 n/a n/a n/a n/a 31,8 1,7 46,5 3,8 Italy 82,6 5,1 20,7 0,6 1,8 0,0 8,5 0,6 2,1 0,0 Netherlands 86,9 2,3 62,3 1,7 25,0 2,3 50,0 1,7 51,0 3,4 Portugal 74,5 8,0 20,7 1,2 10,3 0,9 11,6 0,4 3,0 0,2 Spain 84,0 5,2 52,1 3,2 6,0 0,4 48,6 4,4 9,1 0,8 United Kingdom 80,5 7,1 38,1 1,1 49,6 4,8 12,3 0,7 71,0 9,0 Notes: * "Other benefits" in Germany also includes "Sickness and invalidity benefits" and "Family Benefits". A: Proportional decline in aggregate poverty due to the benefit (%, ceterus paribus) B: Increase in poverty due to a 10% cut in the benefit (%) Source: Heady et al. (2001).
14 Meaning of Social Safety Nets Targeted support to the poor There are poor!! (definition of poverty) Outcome markets corrected by targeted income support (when something happens) Less in Europe (history) Today: Life course framework
15 Life course framework: the Standard Europe UCA, age 0-16 EA, age ILI; SA; CSP, age UP; CP+CSP; PP; SA DA for people disabled from birth as well as for those who are permanently or temporarily disabled Investment in human capital/educational system Re-training, employment protection, minimum standards, wage Health, disasters, family protection, care facilities all age groups and handicapped
16 Life course framework: the Standard LDC SA SA DA for people disabled from birth as well as for those who are permanently or temporarily disabled
17 Life course framework: the Standard USA ILI; SA; CSP, age CP+CSP; PP; SA DA for people disabled from birth as well as for those who are permanently or temporarily disabled Investment in human capital/educational system Re-training, employment protection, minimum standards, wage Health, disasters, family protection, care facilities all age groups and handicapped
18 Social assistance targeted income support is complemented by State supported investment in human capital (children allowances, study grants, subsidized educational system, (re-)training Shock absorbers: health, calamities, disasters, disability Regulatory protection: employment (u, ill), minimum standards, minimum wage, family protection (divorce, alimony), care facilities for children, elderly, handicapped.
19 State assisted Social Protection Social investment Social support Social crisis support Social insurance Social assistance Of last resort Targeted income support to the poor
20 Figure 2.1 The Filtering Process 0 Needy 1 Targeted Needy 0 to 1: deserving poor; Recognition rate 2 Legally eligible claimants 1 to 2: Inclusion rate 3 Applying claimants 4 Accepted claimants 2 to 4: Take-up rate 2 to 5: Participation rate 3 to 4: Eligibility rate 5 Actual beneficiaries 4 to 5: Service rate
21 Bureaucratic control vs discretionary power Activation measures family obligations vs collective solidarity duration Universal vs category based SWEDEN FRANCE Generosity Recipients duties selectivity GERMANY PORTUGAL ITALY SPAIN
22 Characteristics of SA systems (1) Belgium France Germany Italy Netherl Spain Sweden Name OCMW RMI Sozialhilfe Mv and MA Bijstand Various Socialbildrag Right Yes Yes Yes No Yes Yes yes region Individual Court CDAS Court No Ministry Theory Court enforcement plus court enforcement + court Providers Munici. Ocmw commission CAF: payment CCAS and SSD: Munici. Munici. Munici. Munici. Munici. Financing Matching grants services Benefits by CAF state; Admin. by state Additional services by munic. Munici. Regional Block grant Regions and munici. Munici.
23 Characteristics of SA systems (contd.) Belgium France Germany Italy Netherl Spain Sweden Name OCMW RMI Sozialhilfe Mv and Bijstand Various Socialbildrag MA Target Universal Universal Universal Categories Universal Universal Universal of households Age limit No (except children) categories No No No Yes No Yes No Income test Social worker Administra. officers Social worker Social admini. Social worker Basic amount individual additions CAF Paying authority Social worker + department Pirmi Housing Special assistance no Housing, Heating, Special assistance Discretion social worker Housing Discretion social worker Additional costs in beginning Plus rent, heating, special costs
24 Characteristics of SA systems (contd. 2) Belgium France Germany Italy Netherl Spain Sweden Name OCMW RMI Sozialhilfe Mv and Bijstand Various Socialbildrag MA Waiting time No 41 No 50 No average Duration Need Need Need Target Need Need Need category Additional duties Monitoring system For U: active job seeking; Rest: pressure to participate PWA Munic. + ministry Insertion contract + sanctions if violated CAF payments SESI insertion contract (publ) Able bodies: looking for job; exceptions single parents or taking care elderly Automated region and nat. Publ. Need and willingness to work Theory yes, practice no. Not Publ Need and willingness to work + train plus active with sanctions Yes, local + ministry Contract, obligation to work No Obligation to work or retrain; exception single parent with child <1; Munic. Micro data to statistics Sweden with regular publ.
25 Characteristics of assisted (1) France Germany Italy Spain Sweden total asst total asst total asst total asst total asst age Gender Male Female Nationality Nationals Non-nat
26 Characteristics of assisted (contd.) France Germany Italy Spain Sweden total asst total asst total asst total asst total asst Household size Marital status Unmarried Married Separated Divorced widowed Groups Single adults Lone parents Couples with children
27 Belgium and The Netherlands and most of European countries Central legislation defining rights Municipal implementation with important local discretionary autonomy Universal and low cost access Combination of services and benefits
28 Cash Benefit and guaranteed minimum - Levels linked to minimum wages - Levels linked to subsistence - Means tested (income and assets) - Maximum levels 2001 per month (in Euro): couple: 1.076,34 single parent: 747,36 (+ 213,53) single person: 533,83 (+ 213,53)
29 and related services Services in kind Assistance in kind Assisted access to public services Obligations and requirements for recipients Workfare pressure (study, activities, )
30 Financing NL: open ended capitation grant B: matching grants (90 % central)
31 Institutional design NL: municipal services with municipal council in charge B: independent commission - elected membership
32 Total time in social assistance 1 6 months 7 12 months months months 1 episodes months 2 + episodes Germany Italy Portugal Spain Sweden
33 Median duration of first four cash periods (months) 1st cash period 2nd cash period 3rd cash period 4th cash period Germany Italy Portugal Spain Sweden
34 Determinants of the rate leaving first cash period episode Germany Italy Portugal Spain Sweden Month Month Month Lone mothers Couples + ch. Single adults Non-target Non-nationals Age Age Age
35 n productivity
36 Changes and trends Perceived problems Changes: Redefining entitlements Activation (de-activation) Improving static effectiveness/efficiency Improving dynamic effectiveness/efficiency devolution
37 Origins of trends Changing economic conditions (full employment and stable marriages) Changes in the demography and new groups Changes in attitudes Immigrants Political discourse
38 Success and failure Three mechanisms: - difficult to activate - Providers seeking fast success - assisted equilibrium and revolving doors
39 Interesting experiments Following up fast: one stop shop CWI (several countries) PWA s (Belgium)
40 Convergence?
41 Challenges Immigrants Children and child poverty: hard pockets Women Elderly
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