social indicators for policy-making daniel kostzer umkc, april 2006
TRANSCRIPT
Social indicators for Social indicators for policy-makingpolicy-making
Daniel KostzerDaniel Kostzer
UMKC, April 2006UMKC, April 2006
IntroductionIntroduction
The usefulness of social indicators The usefulness of social indicators for the design and definition of for the design and definition of social policiessocial policies– Define the problems to addressDefine the problems to address– Define targeted populationsDefine targeted populations– Definition of plans, programs and Definition of plans, programs and
toolstools
Methods to meassure Methods to meassure povertypoverty Indirect methodIndirect method
– Household IncomeHousehold Income– Household ExpendituresHousehold Expenditures
Direct methodDirect method– Unsatisfied basic needs indicatorsUnsatisfied basic needs indicators
Merging of methodsMerging of methods– Katzman matrixKatzman matrix
Indirect methodIndirect method
Definition of the poverty lineDefinition of the poverty line Definition of indigence lineDefinition of indigence line The problem of circularity in the definition of The problem of circularity in the definition of
the poverty linethe poverty line Using consumptionUsing consumption
– Stable, but does not takes into account savings Stable, but does not takes into account savings (future or past consumption)(future or past consumption)
– Food expenditureFood expenditure Using incomesUsing incomes
– Volatile, defines entitlement, or potential well beingVolatile, defines entitlement, or potential well being
Incomes and expenditure Incomes and expenditure according deciles of income according deciles of income distributiondistribution
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1 2 3 4 5 6 7 8 9 10
Income
IngresoExpenditure
Food expenditure by deciles Food expenditure by deciles of income distributionof income distribution
0
10
20
30
40
50
60
1 2 3 4 5 6 7 8 9 10
Sen’s axioms on Sen’s axioms on poverty indicatorspoverty indicators TargetingTargeting
MonotonicityMonotonicity
TransferenceTransference
The index should The index should point out who are the point out who are the poorpoor
When a poor person When a poor person looses its income the looses its income the index should reflect index should reflect thatthat
When a poor person When a poor person transfers his income transfers his income to other less poor but to other less poor but that remains poorthat remains poor
Emerging indicators Emerging indicators with the indirect with the indirect methodmethod
Incidence of Incidence of povertypoverty
Intensity of Intensity of povertypoverty
100.
.
populationtotal
poppoorH
1001
PL
YPLI N
Combined indirect Combined indirect indicators: Sen’s indexindicators: Sen’s index
HS
Gini
IHS
Gini
GiniIIHS
1
.
0
).1(.
Lorenz curve for Lorenz curve for Argentina 1992-2000Argentina 1992-2000
0
10
20
30
40
50
60
70
80
90
100
0 10 20 30 40 50 60 70 80 90 100
Cumulative percentage of population
Cu
mu
lati
ve P
erce
nta
ge
of
Inco
me
1992
2000
Gini coefficient Gini coefficient
The formulaThe formula Calculate the Calculate the area below the area below the Lorenz curve LLorenz curve L
Simpson Simpson integrationintegration
If Gini=0 perfect If Gini=0 perfect equalityequality
If Gini=1 absolute If Gini=1 absolute inequalityinequality
Jjj rSSL
LGini
)(21
50005000
1
Direct indicators (UBN)Direct indicators (UBN)
The UBN indicators are direct The UBN indicators are direct since they emerge after direct since they emerge after direct observation of households and observation of households and individualsindividuals
They do not reflect (necessary) They do not reflect (necessary) monetary incomes of the monetary incomes of the households, but the level of households, but the level of satisfaction of certain needs.satisfaction of certain needs.
Types of direct Types of direct indicatorsindicators
Result indicatorsResult indicators
Input indicatorsInput indicators
Access Access indicatorsindicators
% of households with more than 3 % of households with more than 3 members in each roommembers in each room
% of houses without sanitation% of houses without sanitation % of HH without running water% of HH without running water % of HH with kids that do not % of HH with kids that do not
assist to schoolassist to school
Doctors per 1000 inhabitantsDoctors per 1000 inhabitants Teachers per 1000 inhab.Teachers per 1000 inhab. Public expenditure in healthPublic expenditure in health % of pop. With vaccination% of pop. With vaccination
Free hospitals, schoolsFree hospitals, schools School in X milesSchool in X miles
Combination of Combination of methods: Katzman methods: Katzman matrixmatrix IncomeIncome
UBNUBNUnder PLUnder PL Over PLOver PL
With UBNWith UBN Structural Structural PovertyPoverty
Inertial Inertial PovertyPoverty
Without Without UBNUBN
New PoorNew Poor No PoorNo Poor
Targeting and Targeting and resources allocationresources allocation There should be a clear cut There should be a clear cut
between the objective population between the objective population and the eligibility criteria for the and the eligibility criteria for the design of social policiesdesign of social policies
They can be universalThey can be universal They can be targeted (a la WB)They can be targeted (a la WB) Or can be combinedOr can be combined
Tools for targetingTools for targeting
Categorical targetingCategorical targeting– Age groups (kids, old)Age groups (kids, old)– Social groups or clusters (unemployed, Social groups or clusters (unemployed,
poor, ethnic groups)poor, ethnic groups)– RegionalRegional
Proxy to means testingProxy to means testing Self-targetingSelf-targeting
– IncomesIncomes– Waiting lists, linesWaiting lists, lines– Previous registrationPrevious registration
Categorical targetingCategorical targeting
Benefits are provided according to demand to Benefits are provided according to demand to every individual in a certain region, group of every individual in a certain region, group of people or combination of bothpeople or combination of both
Requires the categorization of regions according Requires the categorization of regions according to the intensity of the desired indicatorto the intensity of the desired indicator
It works well when there is high correlation It works well when there is high correlation between poverty and localizationbetween poverty and localization
It requires deep knowledge of the demographic It requires deep knowledge of the demographic composition of the region or groupscomposition of the region or groups
Combining the two systems provides the best Combining the two systems provides the best resultsresults
Proxy of means testingProxy of means testing
Assumes incomes to target, but also that Assumes incomes to target, but also that there are registration problems due to under there are registration problems due to under or miss declarationor miss declaration
Uses correlations between HH characteristics Uses correlations between HH characteristics (some of them structural) and incomes (some of them structural) and incomes (water, tv, car, type of house)(water, tv, car, type of house)
These models give a probability that a HH These models give a probability that a HH would have the income required to be into would have the income required to be into the programthe program
The aplicability of the selection model The aplicability of the selection model depends on the relationship existing between depends on the relationship existing between the income and HH characteristicsthe income and HH characteristics
Self selectionSelf selection
Consist in defining incentives Consist in defining incentives tight enough to avoid tempting tight enough to avoid tempting other people than the intended to other people than the intended to apply for the benefitapply for the benefit
Low benefitLow benefit Work commitmentWork commitment Waiting list and queuesWaiting list and queues Difficulties collecting the benefit Difficulties collecting the benefit
Labor market Labor market institutions and the institutions and the concept of concept of Decent WorkDecent Work
Daniel KostzerDaniel Kostzer
Kansas City, April 2006Kansas City, April 2006
Some figures…Some figures…
open unemployment in the world is about 160 open unemployment in the world is about 160 million, of whom some 53 million live in million, of whom some 53 million live in industrialized and transition economies. An industrialized and transition economies. An additional 310 million do not have enough work;additional 310 million do not have enough work;
it is currently estimated that there are some 530 it is currently estimated that there are some 530 million “working poor” earning less than enough to million “working poor” earning less than enough to generate a family income of US$1 per day per generate a family income of US$1 per day per capita to support the rest of the 1.2 billion who are capita to support the rest of the 1.2 billion who are living below the poverty line;living below the poverty line;
in recent years, the global economy has been in recent years, the global economy has been creating about 40 million jobs a year, whereas creating about 40 million jobs a year, whereas there are 48 million new jobseekers annually;there are 48 million new jobseekers annually;
over the next decade, the world’s labor force is over the next decade, the world’s labor force is projected to increase by 500 million workers, 97 projected to increase by 500 million workers, 97 per cent of whom will be in developing countries.per cent of whom will be in developing countries.
Somavia, 1999Somavia, 1999
Decent work as productive toil in Decent work as productive toil in which rights are respected, security which rights are respected, security and protection are provided , as well and protection are provided , as well as the possibility to take part in all as the possibility to take part in all decisions that may affect workersdecisions that may affect workers
Opportunities for women and men to Opportunities for women and men to obtain decent and productive work obtain decent and productive work in conditions of freedom, equity, in conditions of freedom, equity, security and human dignity.security and human dignity.
In simple words…In simple words…
it is productive and secure work it is productive and secure work it ensures respect of labor rights it ensures respect of labor rights it provides an adequate income it provides an adequate income it offers social protection it offers social protection it includes social dialogue, union it includes social dialogue, union
freedom, collective bargaining freedom, collective bargaining and participation and participation
Dimensions of decent Dimensions of decent work ILO 2000work ILO 2000 a) Opportunities for work; a) Opportunities for work; b) Work in conditions of freedom; b) Work in conditions of freedom;
– Bonded labor, slave, child laborBonded labor, slave, child labor c) Productive workc) Productive work
– To ensure livelihoods of workers and families, as well to To ensure livelihoods of workers and families, as well to ensure sustainable development and competitiveness of ensure sustainable development and competitiveness of enterprises and countriesenterprises and countries
d) Equity in workd) Equity in work– Fair and equitable treatment and opportunities, avoidance of Fair and equitable treatment and opportunities, avoidance of
discriminations.discriminations. e) Security at worke) Security at work
– Safeguarding health, pensions, livelihood, limits to the Safeguarding health, pensions, livelihood, limits to the insecurity of loosing the jobinsecurity of loosing the job
f) Dignity at workf) Dignity at work– Voice and participation in decision making about their own Voice and participation in decision making about their own
working conditionsworking conditions
Measurement categories Measurement categories of decent workof decent work Employment opportunitiesEmployment opportunities Unacceptable workUnacceptable work Adequate earnings and productive workAdequate earnings and productive work Decent hoursDecent hours Stability and security of workStability and security of work Balancing work and family hoursBalancing work and family hours Fair treatment in employmentFair treatment in employment Safe work environmentSafe work environment Social protectionSocial protection Social dialogue and workplace relationsSocial dialogue and workplace relations Economic and social context of decent workEconomic and social context of decent work
Employment Employment opportunitiesopportunities Labor force participation rateLabor force participation rate Employment/population rationEmployment/population ration Unemployment rateUnemployment rate Youth unemployment rateYouth unemployment rate Time related underemployment Time related underemployment
raterate Share of wage employment in total Share of wage employment in total
employmentemployment
Unacceptable workUnacceptable work
Children not in school by Children not in school by employment statusemployment status
Children in wage employment or Children in wage employment or self-employed activitiesself-employed activities
Forced laborForced labor
Adequate earnings and Adequate earnings and productive workproductive work
Percentage of employed earning Percentage of employed earning less than one half of median less than one half of median earnings earnings
Average earningsAverage earnings Excessive hours of workExcessive hours of work Time related underemploymentTime related underemployment Employees with recent job trainingEmployees with recent job training
Decent hoursDecent hours
Excessive hours of work (over-Excessive hours of work (over-employment)employment)
Time related underemployment Time related underemployment raterate
Atypical or asocial work hours (or Atypical or asocial work hours (or seasons)seasons)
Stability and security Stability and security at workat work Tenure less than one yearTenure less than one year Temporary workTemporary work Intermittency of employmentIntermittency of employment
Balancing work and Balancing work and family lifefamily life Employment rate for women with Employment rate for women with
children under compulsory school agechildren under compulsory school age Excessive hours of workExcessive hours of work Flexibility of work and accommodation Flexibility of work and accommodation
of family needs (sick child leave, birth of family needs (sick child leave, birth leave, etc.)leave, etc.)
Availability of child careAvailability of child care Workplace issues connected with Workplace issues connected with
population ageingpopulation ageing
Fair treatment in Fair treatment in employmentemployment Occupational segregation by sexOccupational segregation by sex Female share of employment in Female share of employment in
managerial and high level managerial and high level occupationsoccupations
Female share of non-agricultural Female share of non-agricultural wage employmentwage employment
Female/male earnings rationFemale/male earnings ration
Safe workSafe work
Fatal occupational injury rateFatal occupational injury rate Labor inspection (number of Labor inspection (number of
inspectors)inspectors) Occupational injury insurance Occupational injury insurance
coveragecoverage Excessive hours of workExcessive hours of work Health insurance coverageHealth insurance coverage Occupational stress and injury rateOccupational stress and injury rate
Social ProtectionSocial Protection
Public social security expenditurePublic social security expenditure Public expenditure on needs-based cash Public expenditure on needs-based cash
income supportincome support Beneficiaries of cash income support (% Beneficiaries of cash income support (%
of poor)of poor) Share of population over 65 years Share of population over 65 years
benefiting from pensionbenefiting from pension Share of EAP contributing to pension fundShare of EAP contributing to pension fund Average monthly pension/wagesAverage monthly pension/wages
Social dialogueSocial dialogue
Union density rateUnion density rate Collective wage bargaining Collective wage bargaining
coverage ratecoverage rate Strikes and lockoutsStrikes and lockouts
Economic and social Economic and social context of the decent context of the decent workwork Output per employed personOutput per employed person Growth of output Growth of output Inflation rateInflation rate Composition of employment per Composition of employment per
sectorsector Income inequalityIncome inequality PovertyPoverty Informal economy employmentInformal economy employment
Labor market policiesLabor market policies
Active and passive Active and passive interventions in the labor interventions in the labor marketmarket
Labor market policiesLabor market policies
Labor market policies (LMPs) are defined here as policies that provide income replacement and labor market integration measures to those seeking work, usually the unemployed, but also the underemployed and the employedwho are looking for better jobs.
Passive labor market Passive labor market policiespolicies So-called “passive” policies are
concerned with providing replacement income during periods of joblessness or job search
They are not conditional upon the integration to the labor market or training– unemployment insurance, – Unemployment assistance – early retirement
Active Labor Market Active Labor Market PoliciesPolicies “active” policies refer to labour market integration
through demand or supply side measures– labor market training, – job creation in the form of public and community work
programmes, – enterprise creation programmes – hiring subsidies.
They are usually targeted at specific groups facing particular labor market integration difficulties– younger and older people– women – disabled
Why ALMPs?Why ALMPs?
They are also an answer to the growing critique that pure income replacement policies might entail disincentives to work once unemployment becomes of longer duration.
Expenditure in LMPs in Expenditure in LMPs in the EUthe EU
Expenditure in LMPs per Expenditure in LMPs per one percent of one percent of unemploymentunemployment
Expenditure in ALMP Expenditure in ALMP increases with economic increases with economic opennessopenness
USA
NZ
J apan
CanadaAustraliaUK Switzerland
Sweden
Spain
P ortugal
Norway
Netherland
Italy
IrelandGermanyFrance
F inland
Denmark
Belgium
Austria
R 2 = 0.3352
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2.8 3.3 3.8 4.3 4.8
Openness (% of external trade in GDP )
Perception of insecurity and Perception of insecurity and expenditure in ALPs expenditure in ALPs (% of people worried to loose (% of people worried to loose
the job)the job)
Austria Belgium Finland
France
Germany
Ireland
Italy
Netherland
Portugal Spain
Sweden UK
Japan
US
30
35
40
45
50
55
0 0.5 1 1.5 2 ALMP spending in % of GDP
Types of ALMPsTypes of ALMPs
TrainingTraining Public works, Public works, Temporary work creationTemporary work creation Employment subsidiesEmployment subsidies Self employment Self employment Small enterprise creationSmall enterprise creation
Problems with ALMPs Problems with ALMPs types: trainingtypes: training Insufficient levels of qualificationsInsufficient levels of qualifications Mismatch between supply and demandMismatch between supply and demand Bad image of unemployedBad image of unemployed Unclear knowledgeUnclear knowledge Disconnection between training Disconnection between training
institutions and employersinstitutions and employers Overeducated unemployedOvereducated unemployed Gender, age, race biasGender, age, race bias
Problems: Public Problems: Public works, temporary job works, temporary job creationcreation Bad image of the long term unemployed, Bad image of the long term unemployed,
stigmatization of participantsstigmatization of participants End of measure equals being again into End of measure equals being again into
unemployment and povertyunemployment and poverty Gender, age, race biasGender, age, race bias Potential displacement from private Potential displacement from private
sector???sector??? Difficulties to enforce the work Difficulties to enforce the work
conditionalityconditionality
Problems: employment Problems: employment subsidiessubsidies Uncertain or no effects in the Uncertain or no effects in the
informal sectorinformal sector High dead weightHigh dead weight Timing of the subsidyTiming of the subsidy Obsolete sectorsObsolete sectors
Problems: Self-Problems: Self-employment, small-employment, small-enterprise creationenterprise creation Problems targetingProblems targeting Access to further credit and Access to further credit and
expansionexpansion Consultancy and trainingConsultancy and training Low productivityLow productivity Enlarging the informal sector???Enlarging the informal sector???
Problems: Employment Problems: Employment servicesservices Administering rather than serving Administering rather than serving
the unemployedthe unemployed Difficulties in remote regionsDifficulties in remote regions Centralized structures?Centralized structures? Low vacancy reportingLow vacancy reporting Low share in employmentLow share in employment Gender bias?Gender bias?
ConclusionConclusion
There is no silver bullet. One size There is no silver bullet. One size does not fit alldoes not fit all
Employment is the best social Employment is the best social and economic policy in the and economic policy in the capitalist frameworkcapitalist framework
Decent work is the best kind of Decent work is the best kind of employmentemployment