social protection and response to covid-19

Social Protection and Response to COVID-19 in Latin America and the Caribbean:
3rd EDITION: SOCIAL SECURITY AND LABOR MARKET
Monica Rubio Gerardo Escaroz
Anna Machado Nurth Palomo
Luis Vargas Marcela Cuervo1
1 Monica Rubio is Regional Adviser on Social Policy of UNICEF Latin America and the Caribbean; Gerardo Escaroz is Social Policy Specialist at UNICEF, Latin America and the Caribbean; Anna Machado, Nurth Palomo, Luis Vargas Faulbaum and Marcela Cuervo are researchers at the International Policy Centre for Inclusive Growth (IPC-IG). We are grateful to Marta Guateiri and Patricia Sanders for their support in preparing the note and the UNICEF Social Policy Officers in LAC for their contributions.
This note was prepared in collaboration by the International Policy Center for Inclusive Growth (IPC-IG) and UNICEF LACRO - Regional Office for Latin America and the Caribbean
1Social Protection and Response to COVID-19 in Latin America and the Caribbean: Social Security and Labor arket
1. Introduction: The impact of COVID-19 on economic growth and the labor market in Latin America and the Caribbean
2 According to Johns Hopkins University data on the number of cases as of August 11: Brazil (Reported: 3,057,470; deceased: 101,752), Mexico (Reported: 485,836; deceased: 53,003) and Peru (Reported: 483,133; deceased: 21,276). See: https://coronavirus.jhu.edu/map.html.
3 As noted by the Oxford Coronavirus Government Response Tracker index that monitors how countries have carried out preventive isolation measures. See: https:// covidtracker.bsg.ox.ac.uk/stringency-scatter
4 Figure that is equivalent to 40 hours a week jobs. For more details, see ILO Monitor: COVID-19 and the world of work. Fifth edition Updated estimates and analysis. 5 ECLAC (2020). Enfrentar los efectos cada vez mayores del COVID-19 para una reactivación con igualdad: nuevas proyecciones. Informe Especial COVID-19 N. 5. Santiago
de Chile: United Nations
In many countries in Latin America and the Caribbean (LAC), more than five months have passed since the emergency due to the COVID-19 pandemic was declared. Although governments’ efforts have been paramount to prevent the spread of the virus, increased numbers of infections since May have positioned the region as the new focus of the pandemic, mainly due to the billowing figures of reported cases and deaths in countries like Brazil, Mexico and Peru2. In view of the implications of the stoppage of economic and productive activities, some countries have chosen to ease restrictions or gradually lift confinement measures for certain economic groups or sectors (Brazil, Bolivia, Costa Rica, Uruguay, Colombia)3.
Flexibility, with the high risks of contagion, that it entails, reflects the urgency to recover the necessary work and income for the survival of families, as well as the pressure of the productive sectors to recover the investments, resources and assets that make up the livelihood of millions of workers in the formal and informal sectors of the countries in the region.
The first and second editions of these technical notes systematize and analyze the social protection measures in response to COVID-19 in Latin America and the Caribbean. The second edition furthered the analysis of the social assistance measures, specifically the new cash transfer programs and
school feeding programs. This third edition updates the general status of government responses to social protection until the beginning of July and examines the social security and labor market measures that have been adopted in relation to the economic slowdown and the upsurge in unemployment in the region. According to the latest ILO estimates for the first half of 2020, the decline in the number of jobs worldwide could reach 480 million4. Latin America and the Caribbean have been particularly affected and it is estimated that at least 55 million jobs (11% of the global total) were eliminated as of the second quarter of 2020.
According to ECLAC, the marked decline of economies as a result of the COVID-19 crisis can have profound effects on poverty conditions in the region: the data currently available indicate that the region’s GDP will fall by at least 9.1% in 2020, which would increase the percentage of the citizens in poverty to 37.3% and the population in extreme poverty to 15.5%.5 In this same scenario of economic contraction, UNICEF and Save the Children have estimated that the proportion of children living in households in monetary poverty could reach up to 48.5%, that is, practically one out of every two children in Latin America and the Caribbean living in households without the necessary income to meet their essential needs. This variation, which involves almost 20 million additional children in poverty, would
2 Social Protection and Response to COVID-19 in Latin America and the Caribbean: Social Security and Labor Market
be concentrated–to a large extent–in South America (just over 13 million), followed by Central America and Mexico (almost 5 million), and the rest in the Caribbean countries (1.2 million).6
Before COVID-19, the countries of the region presented different coverage levels of social security systems and the proportion of formal and informal workers was quite heterogeneous. Although the average labor force in the informal market (urban employed in low- productivity sectors) is 49.1%, informality levels vary significantly, close to 35% of the urban employed in countries like Costa Rica, Chile, Uruguay, and Panama, while in other national labor markets this rate is equal to or greater than 55%, as occurs in Colombia,
6 For more details, see: Children in monetary poor households and COVID-19: Technical Note. 7 ECLAC (2020). CEPALSTAT. Santiago: United Nations. Available at: https://cepalstat-prod.cepal.org/cepalstat/tabulador/ConsultaIntegrada.asp?idIndicador=252&idioma=e
Guatemala, Nicaragua, Honduras, Peru, Ecuador and Bolivia.7 Even though the economic contraction will inevitably aggravate unemployment levels (regional rate of 13.5%, equivalent to 44.1 million people without work), creating a spike in informality and precarious working conditions, ECLAC indicates that unemployment rates in many countries of the region had already been showing signs of concern due to meager economic performance in the second half of the 2010s (see Figure 1). This context predicts that the pandemic will relentlessly destroy jobs in economic sectors such as commerce and tourism, with a greater impact on women, and the consequent deterioration of the conditions of children and adolescents.
Graph 1. Unemployment rates, by sex (Average annual rate)
Source: ECLAC: Economic Commission for Latin America and the Caribbean – Based on official figures from the countries.
https://cepalstat-prod.cepal.org/cepalstat/tabulador/ConsultaIntegrada.asp?idIndicador=127&idioma=e.
Women Men Both sexes
Gender gaps in the labor market in Latin America and the Caribbean
8 Lexarta, L., Chaves, M.J., and Carcedo, A. (2018). “Equidad en la legislación laboral para el trabajo doméstico”, in Salazar-Xirinachs, J.M, and Chacaltana, J. (eds.) (2018). Politicas de Formalización en América Latina: Avances y Desafios. Lima: ILO, Regional Office for Latin America and the Caribbean.
9 IPC-IG and UNICEF. 2020. Maternidad y paternidad en el lugar de trabajo en América Latina y el Caribe — politicas para la licencia de maternidad y paternidad y apoyo a la lactancia materna. Brazilia and Panama City: International Policy Centre for Inclusive Growth and United Nations Children’s Fund - Regional Office for Latin America and the Caribbean.
In global labor market terms, 38.1% of employed women are self-employed and work in unpaid family work. For example, feminization is prevalent in domestic work, where 93% is made up of women, and with an informality rate of 77.5%.8 Furthermore, 79.2% of women are engaged in low-productivity economic sectors (13.9% of them precisely in domestic work), a proportion that contrasts with 58.3% of their male peers.
On the other hand, despite the boost in women’s labor force participation, the process of redistribution of time dedicated to domestic tasks and unpaid care within the home has been imbalance, since women still bear the burden of allocating a significantly higher portion of time to this activity than men. An important social protection element to reverse this imbalance
consists in the extension of parental leave, in combination with national care systems, since they tend to contribute to the redistribution of domestic tasks and unpaid care, as well as economic well-being of family thanks to women’s labor participation.9
Women face a situation that is marked by greater employability in low-wage informal jobs, devoting more time to unpaid domestic work than men. Consequently, women’s unstable and precarious labor insertion has a direct impact on the well-being of children and adolescents, which is why the economic effects of the pandemic constitute a serious threat to guaranteed income and enjoyment of rights of this group of the population.
DOMESTIC WORK DOMESTIC WORK
of employed women are self-employed and work in unpaid
family work
DOMESTIC WORK ACCORDING TO THE TYPE OF EMPLOYMENT DOMESTIC WORK
WORKERS IN LOW PRODUCTIVITY SECTORS
Likewise, as the pandemic progresses, new information on the effects of COVID-19 is known in the countries of the region, in relation to households with children and adolescents. As revealed in the last edition in the Argentine case, there is also a greater impact in Mexico on issues such as household income, food security or negative coping strategies in households with children
when compared to households without them. Although most of the countries in the region have implemented different social protection measures to compensate for the drop in household income, the information gathered demonstrates the need to focus more on the response to children and youth, since they are also affected in areas such as education and mental health.
Mexico: Monitoring Survey of the Effects of COVID-19 on the Well-being of Girls, Boys and Adolescents
In Mexico, public information on the impact on families with children and adolescents in emergencies has been scarce. In the context of COVID-19, timely information is required for decision-making and to guide public policies for this population.
A joint effort in May between the Instituto de Investigaciones para el Desarrollo con Equidad (EQUIDE), attached to Universidad Iberoamericana de Mexico, the OEI and the UNICEF Office distributed the ENCOVID-19 on children, to deliver information on the impact on the well-being of children and adolescents in Mexico, in the face of the crisis caused by the COVID-19 pandemic.
The ENCOVID-19 on children is a nationally representative telephone survey that will be conducted monthly during the rest of 2020, which broadens the current view of the ENCOVID-19. This recurring measurement instrument, implemented by EQUIDE, serves to understand how the already reported effects of COVID-19 on employment, income, food and mental health in Mexican homes are reflected in families with girls and boys. The sample included 1,680 people aged 18 years or over, 885 of whom reported that their home was inhabited by people aged 0 to 17 (52%). The information collected from the surveys produced the following results:
Employment and income
• In May 2020, more than 4.6 million people in households with children were unemployed, on leave without pay, or could not go out to look for work (55.0% of all unemployed nationally).
• 32.3% of households with children report that one or more members of the household have lost their job or source of income with the quarantine, while households without children only 21.9% report this same situation.
• 73.5% of households with children reported a reduction in household income in May (compared to February), while only 57.9% of households without children reported it. In households with children and with lower income, the reduction averaged 52.8%.
Food security
• The percentage of households without concerns about the quantity and variety of food in their home was only 27.3% in households with children, while in households without children it was 42.1%.
• Moderate or severe food insecurity affected about one in four households with children and about one in five households without children.
Access to social protection programs
• 3 out of 10 households with children report receiving some social program or government aid, mainly the pension for well-being and the Benito Juárez Scholarships.
• On average, the aid represents 23% of the income of households with children, but double that of households without children.
Coping strategies
Due to lack of money or resources, 20% of households with children stopped paying debts (15% in households without children), 30% borrowed money from acquaintances (20% in households without children), 20% stopped paying rent or services (15% in homes without children) and 15% pawned or sold valuables (9% in homes without children).
Learning at Home
• 78.6% of households with children reported that they had problems to continue with distance education, while only 21.4% did not report any difficulties.
• Among the households that reported difficulties, the main difficulties were lack of computer or internet (48.5%) and lack of teacher support (31.4%).
Anxiety
• 35.7% of people living in homes with children reported severe anxiety symptoms, while that percentage was 26.7% for those in homes without children. In households with 3 or more children, the incidence rises to 44.3%.
• 34.2% of households with children reported that arguments and tensions at home have increased.
Source: EQUIDE-UIA. For more information, see https://equide.org/pobreza/https-equide-org-pobreza-impactos-del-covid-19-en-mexico/
2. The social protection response of Latin America and the Caribbean: Where are we?
10 Annex 1 contains the details of the measures for all the countries in the region for which information is available and which were analyzed. 11 The payment of the cash voucher will be offered to 540,000 older adults to replace the delivery of food bags that can no longer be distributed by the quarantine. See
more details at https://bit.ly/305u5V8. In Uruguay, this modality has delivered 270,000 baskets that, according to the government, also benefit the country’s retail busi- nesses. See: https://bit.ly/3g5SPC5
12 “Plan Alimentos para Chile”. See: https://bit.ly/3g6acTz 13 Chile: https://bit.ly/3f04hxW ; Paraguay https://bit.ly/2D8agDM; El Salvador: https://bit.ly/3jNUsqi 14 In Peru, the Ministry of Development and Social Inclusion (Midis), through Qali Warma and in coordination with other ministries, began delivering food to indigenous
people in the Amazon region. Peru: Decreto Legislativo Nº1472 and https://bit.ly/2P1EMle 15 Publication by UNICEF, UNESCO, WFP and the World Bank. See: https://uni.cf/2Eq5CBC
Table 1 shows a synthesis of all the measures identified up to July 1, 2020, which include Nicaragua as one of the last countries to adopt some type of response.10 In terms of social assistance and regarding transfer programs, 21 countries in the region have already implemented them as their main strategy to increase the coverage of social protection systems for the most vulnerable families and groups. On this occasion, the case of Honduras stands out with the assistance offered to independent workers, the extension until December of the Colombian Ingreso Solidario (Soliday Income) transfer program, the increase in the value and the expansion of coverage of the Chilean Ingreso Familiar de Emergencia (Emergency Family Income), and the new provisions for employment protection in Nicaragua.
Concerning food programs, around 21 countries deliver food directly, basic baskets and food cards. Among the most recent adaptations of these programs is the change of the comprehensive medical care program (PAMI) in Argentina, which increased the benefit and changed the food basket for cash vouchers; Uruguay made a second delivery of the food stamps on a digital application (with 210,000 people accessing the benefit in the first stage);11 and Chile launched the Alimentos para Chile (Food Plan for Chile), which delivers baskets to the most vulnerable and middle-class families who
are quarantined. The plan began in the communes of greater Santiago and has been progressively extended to the rest of the country.12
Regarding school feeding programs, the novelty is that several countries adapted the school meal distribution processes to encompass protection to families with school-age children. In Paraguay, the Mi almuerzo escolar en familia (my family school lunch) program carries out its fourth event supplementing the food kits, and in El Salvador the Ministry of Education directly delivered the Paquetes de Alimentación Escolar Familiar (family school food packages) in the municipalities that, in addition to suffering from the impacts of the COVID-19 are also facing a season of heavy rains.13 In Peru, the Qali Warma program was exceptionally expanded for vulnerable people or population groups, allowing the purchase and delivery of food to municipalities.14 Lastly, in Uruguay, which will reopen mainly rural schools, authorities are reviewing the relevance of offering meals again in school cafeterias and evaluating the respective procedures. UNICEF and other international organizations issued guidelines for the adoption of security protocols for the reopening of schools. Highlighted among them is the importance of implementing measures for cleaning the facilities, adapting schedules to avoid crowds and safe food preparation.15
Family or psychosocial support services are also more recurrent and gain relevance in the face of deteriorating living conditions, which have a significant impact on children and adolescents and their families. More than 12 countries have implemented protection services for vulnerable groups, psychological support, and contagion prevention and control. Some featured cases are Jamaica, which created a psychosocial support line for families with children, Peru with the Tele-Covid service, Belize with MOH-CARE, and Uruguay
16 In countries such as Belize, the reduction in the water service rate was 25% between March and May, for those who consumed up to a maximum of 3,000 gallons per month (see https://bit.ly/2D89O8y). In Bolivia, the rates for drinking water, household gas and electricity were reduced by up to 50% for the most vulnerable population (Decreto Supremo 4200). Countries like Panama, Paraguay and Guatemala also enacted maximum consumption quotas to reduce water and energy bills. Brazil, for its part, established a 100% decrease under the “Social Rate of Energy” for those who consume up to a maximum of 220 kWh/month (Medida Provisória 950). In Colom- bia, the decrease in tariff costs was for public services administered by territorial entities such as the aqueduct, sewerage and waste management according to the economic level of the population’s spatial location (Decreto Legislativo 580). And in Panama, a project is underway to maintain the reduced electricity rate until December, see: https://bit.ly/2P1E4V6)
17 Chile (Plan Solidario de Conectividad), Costa Rica (Directriz GG-2020-01225), El Salvador (Diario Oficial Tomo 427) and Peru (Decreto Supremo Nº 044-2020-PCM). 18 El Salvador Diario Oficial Tomo No 427 (30-03-2020), Venezuela (servicio de telecomunicaciones), Cuba (Documento Oficial Etapa de Recuperación), Colombia (Decreto
540 (13-04-2020); Honduras (No suspensión de los servicios Telecomunicaciones); Argentina (Comunicación oficial del 18 de mayo de 2020). 19 Jamaica: https://www.unicef.org/jamaica/press-releases/npsc-launches-parent-support-helplines-amid-covid-19-crisis; Peru (Resolución de Dirección Ejecutiva N° 020-
2020); Belize: https://bit.ly/2AxceMQ, and Uruguay: https://bit.ly/2ZVntaP. 20 Colombia: Decreto 460/20; Costa Rica: https://bit.ly/3e2KQUE; Ecuador: Acuerdo Nacional 2030 “Por una vida libre de violencias”; Peru: https://www.gob.pe/coronavirus;
Uruguay: https://bit.ly/2ZETyTT; Brazil: Lei Nº 14.022, de 7 de julio de 2020; and Mexico: Press circular of April 6, 2020.
with the Linea de Apoyo Psicológico (psychological support line) available to the general population for guidance and support for people who feel stress, anxiety and anguish because of the isolation and emergency situation.19 Faced with cases of domestic violence, countries such as Brazil, Colombia, Costa Rica, Ecuador, Peru, Uruguay and Mexico adopted special provisions for the care of victims during this confinement period. Strategies include standards, essential health and protection services, communication campaigns and the use of applications to obtain assistance.20
Since the focus of this note is on Social Security and the labor market, Part 3 provides details of the implementation of these measures in 25 countries of the region as a response to the economic effects of the pandemic. Programs related to job protection, early access to severance pay or other salary benefits, and contributory system pensions are identified.
The social security instruments most used by the countries during the current context are advance payments of unemployment insurance and other salary benefits of contributory regimes, benefiting salaried workers in 12 countries. Adaptations to the pension system have been made in 9 countries, in particular, for advance payments or increased amounts, paid only once. Until the end of June, Peru was the only country that authorized withdrawals of pension funds from individual retirement accounts. On the other hand, the few extensions of unemployment insurance in the region meant that only 9 countries had adapted
“UNICEF and Save the Children have estimated that
the proportion of children living in monetary poverty households could reach up
to 48.5%, that is, practically one out of every two
children in Latin America and the Caribbean living
in households without the necessary income to meet their essential needs. This
variation, which implies almost 20 million additional
children in poverty, would be largely distributed in South
America (just over 13 million), then in Central America and
Mexico (almost 5 million), and the Caribbean countries
(1.2 million)”
their schemes for the temporary suspension of contracts and payment of salaries, or they admitted a significant withdrawal of the money accumulated in individual accounts to inject liquidity to family economies. Lastly, 8 countries granted special medical licenses for isolation requirements, without the infected person having salary deductions for the days not worked, and access was guaranteed to health insurance benefits.
The countries of the region have also been forced to implement new programs or adapt their labor markets, especially concerning the regulation of telework, since the adoption of this modality (20 countries) and employment protection (18 countries) has been massive. Also, 10 countries implemented support measures for micro, small, and medium-sized companies to promote employment and overcome liquidity restrictions that were making survival difficult. Finally, 10 countries have created tax adjustments to award financial flexibility to firms in economic sectors that are experiencing greater difficulties, with exceptional measures aimed at advancing income taxes for independent workers. The details of all these measures appear in part 3 of the Note. Table 1 provides an overview of the social protection measures adopted in LAC.
Table 1. Social protection and labor market measures in Latin America and the Caribbean (as of 30 June 2020)
Components of Social Protection/Countries A
R G
B E
Use or adaptation of existing transfer programs
1 1 1 1 1 1 1 1 1 1 1 11
Creation of new transfer programs
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 16
VAT refund 1 1 2
Use or adaptation of existing food programs
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 17
Creation of new food programs
1 1 1 1 1 1 1 1 1 1 1 1 1 13
1.1 Access to Services 0
Family or psychosocial support services
1 1 1 1 1 1 1 7
Bonds or housing subsidy 1 1 1 1 1 5
Subsidy bonds for water, electricity and internet services
1 1 1 1 1 1 1 1 1 1 1 1 1 13
2. Social Security
Adaptation of the pension system
1 1 1 1 1 1 1 7
Severance advance, other salary benefits (13th; 14th salary)
1 1 1 1 1 1 1 1 1 1 10
Health insurance 1 1 1 1 1 1 6
Sick leave 1 1 1 1 1 1 6
Support for self-employment
3. Labor Market
Employment protection measures
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 18
Support for SMEs 1 1 1 1 1 1 1 1 1 1 10
Telework 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 19
Tax reduction/rebates 1 1 1 1 1 1 1 1 1 9
Reduction of hours worked
1 1 1 1 1 1 1 7
TOTAL 11 8 8 11 10 12 13 5 6 4 8 3 3 7 10 6 6 11 14 7 2 7 8 5
Source: Prepared by the authors based on information provided by UNICEF’s National Social Policy Officials in the region and other sources. Note: Green represents measures at the sub-national level.
Update of Cash Transfer Programs in Response to COVID-19
Until the beginning of July, cash transfer programs continued to be a central part of the social assistance response in 21 countries in the region, either by adapting existing transfer programs (for example, increasing the amount of benefits, making advance payments, or paying additional installments) or creating new temporary programs. Of the countries reviewed, only Cuba, Nicaragua, Guyana, and Suriname show no evidence of the creation or adaptation of cash transfer programs in response to COVID-19.
In the last two months, with the prolongation of the crisis and the social distancing measures, various adjustments and adaptations of the programs have been made, such as: (i) extending the period or making changes in periodicity to guarantee protection for a longer phase (Argentina, Brazil and Colombia); (ii) expanding coverage to new groups in addition to those eligible for the bonds, particularly temporary programs (Guatemala, Paraguay and the Dominican Republic); and (iii) guaranteeing access and swiftness in the distribution
of the different benefits making operational adaptations to registry systems (Peru, Brazil and Colombia).
The response of pre-existing transfer programs
From the beginning of the crisis, the vertical expansions of the monetary programs allowed increasing the amounts for a defined period or advancing payments. After more than four months, the governments of Colombia and Uruguay, which offered a single payment, have expanded their programs as a result of the extension of the isolation measures or the extension of the emergency.
The coverage of pre-existing programs varies between countries in the region. Of the 25 countries analyzed, 8 used their cash transfer programs for families with children, mainly in the South American region. While in countries such as Colombia, Brazil and Argentina they have a broad coverage exceeding 20%, in Uruguay two important programs are implemented with coverage varying between 10.8% and 12%. Table 2 summarizes the information for all pre-existing programs that were used in response to the crisis.
Table 2. Pre-existing conditional cash transfer programs COVID-19 adaptations (March to June)
Country Program Periodicity Increase in or advance
payments
Belize The Boost Program Once 9,911 2.6%
Brazil Bolsa Familia Five times From 3-5
53,229,083 24,8%
10,548,119 21.5%
Paraguay Tekoporã Once 840,648 12.2%
Peru Juntos Once 3,520,729 10.8%
Uruguay
372,231 10.8%
417,602 12.0%
Source: Prepared by the authors based on available national information. Coverage (persons) from ECLAC, Database of non-contributory social protection programs in Latin America and the Caribbean.
In Jamaica, Paraguay, Peru and Belize, the single-time delivery of an additional amount or advance payments were made. For example, the PATH social assistance program in Jamaica delivered a 50% increase in value between April and June, benefiting 12.4% of the population; and the Tekoporã program in Paraguay advanced payments by 2 months and in May offered an extra bonus to the more than 840,000 beneficiaries (12.2% of the population). Likewise, in Paraguay more beneficiaries entered the financial system through the process of accessing banking services offered by the Government.21
The Colombian system, which initially prepared a single payment in April, decided to grant an additional transfer in June to beneficiaries of the Familias en Acción (families in action), 2.5 million households, and Colombia Mayor (older Colombia), 1.7 million people, programs. In Uruguay, where the amounts of the Tarjeta Uruguay Social (Uruguay social card) and Asignación Familiar Plan de Equidad (equity plan family allowance) programs–more than 80,000 households and approximately 372,000 people, respectively–had doubled at the beginning of the crisis (March and April), these amounts received a new duplication in June and July.22 It should be noted that, although some of the beneficiaries of the Tarjeta Uruguay Social also receive the Asignación Familiar Plan de Equidad, the Government grants them only one of the benefits.
Beneficiaries of programs such as Asignación Universal por Hijo or AUH (universal allowance per child) in Argentina, Bolsa Familia (Family Bag) in Brazil and the Juntos (together) and Pensión 65 (pension 65) programs in Peru also started to benefit from
21 Currently, 76% of participants receive their transfers through debit cards, (7%) via electronic payment, (4%) do so by mobile ATM, 10%) via Post and (3%) receive their payments at the counter. See: https://bit.ly/39FcaYI
22 Colombia: Anuncio de Presidencia 1° de junio de 2020; Uruguay: Comunicación oficial del 28 de mayo de 2020. 23 Within the second group of beneficiaries of the Bono Familiar Universal, plus the 34,000 families in the Huánuco region. See: https://bit.ly/304DYT2 and https://bit.ly/3jK-
poI2 24 Until the end of June, no measures to extend these programs were identified.
the new temporary transfer programs,23 which are detailed below.
Temporary cash transfer programs
Most of these programs were created with populations not covered by social protection in mind, either because of their contributory or their non-contributory pillars. The selection of beneficiaries mainly includes poor families, non-poor but vulnerable families, and informal or self-employed workers. Although the criteria specify various eligible groups, all-cash transfers have sought to reduce the negative socioeconomic effects of the crisis on family income. These programs have undergone a number of important operational adaptations, more than four months after the start of the pandemic.
In total, there are 26 temporary cash transfer programs adopted by 18 countries in the region. Some countries, such as Bolivia, Chile, Peru, the Dominican Republic and Venezuela, created more than one program according to the target population. Eight countries also stand out (Argentina, Brazil, Chile, Colombia, Costa Rica, Jamaica, Paraguay and Peru) that used both pre-existing transfer programs (conditional transfers for families and social pensions) and new programs to expand social protection coverage in the face of the COVID-19 crisis. Recently, the Dominican Republic’s Pa’ Ti (for you) program and Venezuela’s Bono Normalidad Relativa (relative normality bonus) launched new programs. Of the programs identified, 19 are still in operation, and the other 7 have already made all the payments.24 Table 3 lists these new measures.
Country Name of Program Local currency/USD PPP # of payments
Status of payments
(B)
Argentina Ingreso Familiar de Emergencia ARS 10,000 (USD 331) 2 Made 8.7 million people
8.7 million people - 19%
Brazil Auxilio Emergencial BRL 600 - 1,200 (USD 223 - USD 446) 5 Underway 80 million people 65 million people 38% 31%
Bolivia Bono Familia BOB 500 (USD 122) 1 Underway 3.2 million
people 2.7 million
people 27% 24%
Bono Universal BOB 500 (USD 122) 1 Underway 4 million people 3.4 million people 34% 30%
Chile
Bono de Emergencia COVID-19 CLP 50,000 (USD 98) 1 Underway 2.7 million people 1.5 million people 14% 8%
Ingreso Familiar de Emergencia (2.0)
CLP 100,000 per person (USD 590.25) 4 Underway 5.6 million
people 4.9 million
people 29% 26%
Colombia Ingreso Solidario COP 160,000 Monthly (USD 96) 9 Underway 3 million homes 2.6 million
homes 21% 18%
CRC 125,000 (USD 289) CRC 100,00 (USD 231)
second payment 2 Underway 33,000 homes 23,700 homes 2% 1.4%
Bono Proteger CRC 125,000 (USD 289) 3 Underway 680,000 people 532,000 people 13% 10%
Ecuador Bono de Protección Familiar por Emergencia (Bono de Contingencia) USD 60 (USD 90) 2 Made 950,000 homes 950,000 homes - 20%
El Salvador Bonos de Compensación USD 300 (USD 521) 1 Underway 1.5 million people 1.2 million people 23% 19%
Guatemala Bono Familia de Q1 mil Q1,000,00 (USD 559) 3 Underway 2.3 million homes 981,000 homes 58% 25%
Haiti Transfert en espèces unique (sub- vention de l’État) 3,000 gourdes (USD 68) 1 Underway 1.5 million people 146,000 people 1% 13%
Honduras Bono Único. Asistencia a los Tra- bajadores Independientes o de Cuenta Propia
2,000 Lempiras (USD 136) 1 Underway 500,000 people 260,000 people 3% 5%
Jamaica The COVID Compassionate Grant $10,000 (USD 101) 1 Made 355,000 people 337,000 people 12% 11%
Panamá Bono Solidario (Plan Solidario) USD 80 (USD 244) 2 Underway 1.2 million people 1.2 million people 42% 29%
Paraguay Programa Pytyvõ PYG 548,200 (USD 172) 2 Underway 1.8 million people 1.1 million people 26% 16%
Peru
Bono Urbano (Yo me quedo en casa) PEN 760 (USD 380) 1 Underway 2.7 million
homes 2.5 million
homes
75%
69%
Bono Independiente PEN 760 (USD 380) 1 Underway 773,000 people 664,000 people 64%
Bono rural PEN 760 (USD 380) 1 Underway 980,000 homes 384,000 homes 29%
Bono Familiar Universal PEN 760 (USD 380) 1 Underway 1.6 million homes 1.4 million homes 66%
Dominican Republic
Programa Pa’ ti DOP 5,000 (USD 185.5) 1 Underway 2.3 million people 200,000 people 21%
Programa Quédate en Casa DOP 5,000 (USD 185.5) 2 Made 1.5 million homes 1.5 million homes 16% 16%
Trinidad & Tobago Public Assistance Grant 500.00 (USD 78)
max. value 3 Underway 42,000 people 42,000 people 14% 14%
Venezuela
Bono especial quedate en Casa - Sistema Patria
VEF 350,000 (USD 2.60) 1 Made 6 million people 6 million people 21% 21%
Bono Normalidad Relativa - Siste- ma Patria NUEVO VEF 600,000 1 Made SE SE - SE
Source: Prepared by the authors based on the official information available from the countries. *(until the end of June) Note: The amounts correspond to the conversion of the local currency, in 2020 values, to international dollars in accordance with purchasing power parity (PPP). The calculation always considers the estimated number of beneficiaries (if available). The % calculation is based on the total population according to the World Bank (2018) and the number of people in the household is made based on the household surveys of the most recent year available.
Graph 2 shows a comparison of the temporary programs, the monthly benefit amount and the coverage percentage in relation to the total population.25 Effective coverage is also shown, which presents the percentage of the population that has already received the payments and program execution. Although the graph illustrates the scope and generosity of the benefit, it should be noted
25 Some amounts may vary according to periodicity and according to the characteristics of the family (as in the case of Brazil) or decrease over time (as in the case of the IFE in Chile). In the case of Peru, the estimated coverage corresponds to the set of various bonds (the “Yo me quedo en casa” bond, Bono Rural and Bono Indepen- diente and Bono Universal). It is also important to bear in mind that the total number of beneficiaries counted for some programs represents both direct and indirect beneficiaries. Others such as the Bono Proteger in Costa Rica offered to workers or the unemployed do not take into account indirect beneficiaries, thus showing a lower coverage of the population compared to other programs. Details of each program appear in Table 3 and in Annex I.
that while some countries made only one payment (Bolivia, Peru, and Venezuela), other countries – with a relatively lower coverage level – have been able to advance in the discussions to prolong the duration of the program, as in the case of Chile (which extended the IFE for a total of 4 deliveries) and Colombia (with a total of 9 deliveries).
Graph 2. Temporary cash transfer programs by country, according to population coverage (%), execution (%) and generosity of the benefit
Source: Prepared by the authors based on official information available from the countries.
Note 1: Effective coverage according to government information until the end of June 2020. Note 2. The % of the population was based on the total population according to World Bank data (2018). *Countries with total individual beneficiaries calculated using the latest available data on average household size. Note 3. The amount corresponds to the conversion of the local currency, in 2020 values, to international dollars in accordance with purchasing power parity (PPP 2011), taking the monthly value of the first month of payment as a reference.
Regarding changes in periodicity, the Argentinian government formalized a second stage of the Ingreso Familiar de Emergencia, which will deliver $10,000 pesos (USD 331) to the approximately 9 million people who received the first bonus. In Costa Rica, the Subsidio de Emergencias (emergency subsidy), which was initially delivered only once,
26 Costa Rica: Presidency of the Republic Press Release. See: https://bit.ly/2CVJQoN
deposited an extraordinary sum of 100,000 colones (USD 231) to 23,700 families in June. Many of these households had already received this support in April, but in this second payment, the government prioritized women responsible for the care of the elderly, people with disabilities and minors.26
At the beginning of the programs, governments announced estimated coverage of the population and number of payments, which vary between single deliveries or distributed over several months. As revealed in Figure 3, of the 26 programs announced in the region, 14 are offered only once. Within that group, only Jamaica, with the COVID Compassionate Grant, and Venezuela, with the Bono especial quedate en Casa (special stay at home bonus) and Bono Normalidad Relativa, have already completed all payments. Until the end of June, there was no confirmation that they would continue with the benefit. Other countries such as Argentina, with Ingreso Familiar de Emergencia, and Ecuador, with Bono de Protección Familiar por
Emergencia (emergency family protection bonus), which offered transfers in two payments, have also already completed their execution, at least for the moment. Bolivia, Brazil, Colombia, Costa Rica, Guatemala, Honduras, Panama, Peru, Trinidad and Tobago and the Dominican Republic with the recently created Programa Pa’ ti, have programs that are still underway. Of note are the countries that have gradually increased the number of bond deliveries since the beginning of the crisis, such as Chile and Brazil, which extended to 4 and 5 months respectively, and Colombia, which has offered a total of 9 months as a result of the extension of the benefit until December.
Graph 3. Temporary programs: Total transfer programs by the number of deliveries
As mentioned, the Ingreso Solidario in Colombia program will be extended, and beneficiaries will continue to receive $160,000 (USD 96) per month until December of this year. Likewise, new families that were not included in the database will receive the accumulated value of the subsidy in a single installment, and approximately 600,000 workers with suspended contracts will also receive the bonus, maintaining a total of 3 million beneficiaries projected since the beginning of the Program.27 In Brazil, the Federal Government confirmed that the Auxilio Emergencial (emergency assistance) will continue for 2 more months (until September) with the same amount of $600 reais (USD 223).28 Until the end of June, more than 65 million people had received the benefit, which represents around 30% of the population.29
Of the countries that will carry out second versions of their temporary program, Chile stands out with the approval of Law 21,243, expanding the Ingreso Familiar de Emergencia (called IFE 2.0). it will run through June, July and August, and will deliver $100,000 pesos (USD 197) for each member of the family of up to a total of 4 members. Important to note in this new version is that informal and formal workers, up to a certain income level, can also receive it. Likewise, those who receive income from pensions of the social security or provisional system may be eligible. The government estimates that approximately 5.6 million people will benefit from the program, that is, almost 30% of the population. It is worth noting that the application for benefits and the same payment modality continue, but those who did not qualify the first time can appeal the rejection resolution, thus allowing more beneficiaries to receive future payments.30
New program eligibles
27 See https://bit.ly/2BzJfIO and https://bit.ly/3hI920R 28 https://bit.ly/2VC3U5J 25. 29 For more details see: https://bit.ly/2BvgPzz 30 Ingreso Familiar de Emergencia 2.0. See: https://bit.ly/2EjnKNm 31 Amendment to the Economic Rescue Law for Families affected by Covid-19 approved by the reform of Decreto13-2020 and Acuerdo Gubernativo Número 84 -2020 of
June 25, 2020.
informal workers have been carried out through massive calls, with the use of other records such as workers’ associations or databases of banking entities. Some examples of these programs are the Bono Único (single bonus) from Honduras, the Bono Independiente (independent bonus) from Peru, and the Pa’ ti program from the Dominican Republic. Poor and vulnerable families have generally been selected through existing registries or on social program targeting systems, either because they were previously beneficiaries or because they are part of groups not yet covered by social protection programs, such as people who receive the Ingreso Solidario in Colombia and the IMAS Subsidy in Costa Rica.
With the economic and social impacts of the crisis deteriorating, governments have adopted changes in the selection mechanisms, further expanding the initial coverage of the programs’ target population. Additionally, declining income and mounting unemployment rates have caused other groups to qualify for benefits. In Guatemala, the Bono Familia (family bonus), which allocates Q1,000, (USD 130) to households with electricity consumption under 200 kW, opened an online registry that will allow more families, retirees and pensioners to apply for the benefit, adding to the more than 1 million who have already received the aid. As a result of the changes in program regulations, families that do not have energy service are also included using the application of the Socioeconomic Conditions Assessment Sheet (FECS). In addition, a priority list of beneficiaries has been created, to include single mothers or single-parent households and families with malnourished children.31 In Brazil, the Auxilio de Emergencia, which is already in its third delivery and has benefited more than 65 million Brazilians,
modified some of its requirements to allow the benefit to be extended to adolescent mothers (under 18 years of age).32
In Paraguay, the Pytyvõ program for informal workers completed the second payment of $548,200 guaranies (USD 172) in June to registered and approved beneficiaries (1,180,000 people). In this second stage, the approximately 250,000 beneficiaries who were on the list of the Ñangareko food assistance program (a single delivery in May) and who met the established requirements were included. The government also intends to launch a second version Pytyvõ.20 that will make up to 4 payments of $500.00 guaranies (USD 157) in each disbursement and will benefit around 700,000 informal workers. This measure is part of the Ñapu’a Paraguay Economic Reactivation Plan, which includes additional investments in social protection programs.33
In the Dominican Republic, another temporary transfer bonus has been prepared for groups not covered by the first measures, thus inflating the coverage of responses to COVID-19. In addition to the Quédate en Casa program, the Pa’ ti program was launched, which will grant $5,000 Dominican pesos (USD 185) to self-employed workers and which, as a novelty, will use the registry of loans with financial intermediation entities to identify beneficiaries.34 Finally, in Venezuela the government launched the Bono Normalidad Relativa in June, where Venezuelans can apply for a new subsidy on the Patria Platform.35
32 However, other categories listed in the project such as domestic and care workers, a sector made up mostly of women, were vetoed at the final approval of the law (LEI No. 13.998, of May 14, 2020). The list of vetoed beneficiaries of the initial project included, among other categories, ethnic groups, family farmers, fishermen, artisans, domestic and care workers. These groups, despite not being explicitly mentioned in the law, can apply to benefits, as long as they meet the requirements.
33 The second Pytyvõ.20 version has yet to go through the approval of the bill that the government will introduce. See: https://www.lanacion.com.py/negocios/2020/06/30/ pytyvo-99-de-las-acreditaciones-ya-fue-desembolsada/.
34 Dominican Republic, Decreto Ejecutivo 185-20. 35 Bono Normalidad Relativa. See: https://as.com/diarioas/2020/06/14/actualidad/1592162619_633353.html 36 According to the Communiqué published by the National Household Registry. See: https://registronacionaldehogares.pe/ and for more information see: https://www.gob.
pe/9022-acceder-al-bono-familiar-universal 37 Regulation “Portaria nº 368, de 29 de abril de 2020”. Available at: http://www.in.gov.br/web/dou/-/portaria-n-368-de-29-de-abril-de-2020-254678819 38 Colombia, see https://www.dinero.com/pais/articulo/que-es-el-sisben-iv-y-cuando-quedara-listo-en-colombia/290386 and Actualización del Sisbén IV, at https://www2.
Social registries
In relation to the beneficiary registration mechanisms, there have also been important changes. In Peru, the National Household Registry was set up so that former beneficiaries of social programs can validate, update, and supplement their household information, and also for new families to have the possibility of registering.36 In Brazil, an exceptional norm enables the government to conduct the collection and updating of data remotely from the Cadastro Unico (single registry) during an emergency situation, for example, by telephone.37 In Colombia, Ingreso Solidario carries out the Toma de municipios (taking over municipalities) strategy to locate more than 600,000 people and therefore complete the goal of reaching 3 million beneficiaries. The measure includes the review of databases of banks, cell phone companies and direct contact with households in 178 territorial entities. Likewise, there is a plan to update the bases of the Sisben (System for the Registry of Potential Beneficiaries of Social Programs) by running surveys in more than 600 municipalities.38
The declared emergency situation in Colombia has also prompted important readaptation processes of its social protection system. In June, the Government announced the creation of the Social Household Registry and the Monetary Transfer Platform, which will allow the validation and updating of the socioeconomic information of the households and beneficiaries of all social programs. This registry, comprehensively, will have information from other administrative registries, the demand for
social aid from the Sisben and the offer of the social program providers. The entity in charge will be the Department of Social Prosperity (DPS), which is already responsible for the Familias en Acción and Jóvenes en Acción (Youth in action) programs, and which will now run the Ingreso Solidario, initially led by the National Planning Department. It is important to mention that the DPS will also implement the Colombia Mayor program and the VAT compensation.39
For its part, Guatemala realized significant reforms to its Bono Familia program. Among the adjustments to the regulation are the construction of the list of beneficiaries that will request information from the National Electric Energy Commission, the Ministry of Energy and Mines and the Electric Energy distributors for the certification of people consuming less than 200 kWh in electricity per month. As in Colombia, the administration, coordination, and budget of the program were assigned to other units. The Social Protection Fund of the superior office of the Ministry of Social Development (MIDES) will have the functions of budgeting, financial and accounting execution, and the administrative management will be the charge of the Directorate of Social Assistance of the Deputy Ministry of Social Protection of MIDES.40
Despite the efforts of governments to enlarge social protection coverage, in many cases, the number of pending applications is an indicator that more investments will be necessary for the response to reach everyone. In Brazil, in view of the high demand for Auxilio de Emergencia, which still has a waiting list of approximately 10 million people after 2 months, the Federal Public Ministry instituted a maximum period of 20 days for eligibility studies of beneficiaries. The institutions responsible for the execution of the program, in addition to allowing the follow-up of
39 Republic of Colombia. Decreto 812, of June 4. 40 Acuerdo Gubernativo Número 84 -2020 of June 25, 2020. 41 For the implementation of the adjustments, an agreement was reached on June 3 between Advocacia-Geral da União (AGU) Ministério da Cidadania, Caixa and Dataprev
(institutions responsible for Emergency Assistance). For more details see: https://bit.ly/308jatL 42 Costa Rica; https://bit.ly/2CVHXIQ 43 Costa Rica Comunicado de presta CP-024-2020 MTSS
registration, will provide mechanisms to appeal the rejection of the applications, allowing applicants to update and correct the data.41
In Costa Rica, 429,000 applications for the Bono Proteger (protect bond) are on the waiting list. The program has benefited some 533,000 people who received at least one of the three payments offered. Budgetary restrictions, though, confirm the impossibility of extending the subsidy beyond three months, and confirmation as to whether the extraordinary budget will reach the new beneficiaries is still pending. The Government will open the possibility for applicants to make modifications to their dossier and thus give priority according to the level of income, heads of household and other vulnerability conditions. Additionally, the Government suspended the receipt of requests for the Non-Contributory Regime (RNC) pensions that benefit, among others, the elderly and minors with disabilities living in poverty and extreme poverty. On average, there are 20,000 pending cases of people who could be eligible for the benefit, but, due to lack of resources, will not yet be able to receive a pension.42
On the other hand, processes for the return of benefits have occurred upon verification of non-eligibility and non-compliance with the criteria that is conducted after delivery of the support. In Brazil, around 39,000 people who did not meet the criteria returned the payments received by the Auxilio de Emergencia, representing a sum of $29.65 million reais (USD 5.7 million approx.), which consequently entered the program. In Costa Rica, the Ministry of Labor and Social Security published and launched the procedure for the refund of the Bono Proteger, by identifying problems in meeting the requirements by some beneficiaries.43
Program adaptations and challenges
Despite digital innovations for payments and the use of online platforms created specifically for registration, consultation and monitoring by beneficiaries, there has been evidence of inequalities and structural deficiencies in the region in relation to services, capacities and technologies necessary to access the programs by some population groups. Other programs have presented technical and operational problems that hinder and delay execution. In Peru, for example, the website enabled for the Bono Familiar Universal (universal family bond) was suspended on one occasion; the deadlines had to be extended, and; some people were unable to register due to outdated work payrolls.44 In Brazil, the Auxilio de Emergencia mobile application presented problems at the beginning of implementation by not allowing beneficiaries to access or carry out transactions. This application represents the only means for some of the unbanked beneficiaries to access the transfer, and delays in
44 Peru: https://bit.ly/2CMVNxf 45 See: https://economia.uol.com.br/noticias/redacao/2020/04/20/usuarios-reclamam-de-dificuldades-para-acessar-o-aplicativo-caixa-tem.htm?aff_
source=56d95533a8284936a374e3a6da3d7996&cmpid=copiaecola 46 Bono Rural at https://www.gob.pe/9070-acceder-al-bono-rural: The fixed platforms present in rural areas have trained personnel and equipment to offer services to vulner-
able populations that lack public services. To learn more see http://www.pais.gob.pe/tambook/pnt 47 For more information see: https://www.correios.com.br/auxilio-emergencial/orientacoes-gerais
the reception not only affect the income of these families but also damage the payment schedule, causing masses in withdrawal points.45
Some necessary adjustments have been noted so that, given the lack of financial services and connectivity, vulnerable populations can have access to benefits. In Peru, the Bono Rural (rural bond) offered to approximately 800,000 families makes a direct-distribution (pay carts) in the most remote locations of the country and using Tambos of the Action Platforms for Social Inclusion (PAIS) national program for beneficiaries to consult and receive advice.46 In Brazil, many of the most vulnerable people had difficulties accessing the internet and were unable to register for Auxilio de Emergencia. In response, the Ministry of Citizenship signed an agreement in June with the state company Correios (which has broad national coverage), so that non- registered people can register in person in local agencies. To avoid crowds, a schedule for service was established according to applicants’ date of birth.47
Main challenges of the social assistance measures adopted
• Inequalities and structural deficiencies in the region (health care, water, electricity, internet, etc.) which, in addition to hindering access to these services, prevent the payment of monetary transfers to vulnerable populations in some areas from being quick and efficient.
• Updating and improvement of registries both to validate the beneficiaries of existing programs and to identify new beneficiaries (for example, informal workers) who were not previously enrolled in social programs.
• Lack of coverage for particularly vulnerable groups such as migrants and indigenous communities.
• Financial limitations to continue expanding the coverage of social protection systems.
• Measures to restrict mobility can make beneficiaries in fragile personal conditions invisible and inaccessible (sick older adults, people with disabilities, women or children under some degree of coercion in their own homes, among other situations), who in other circumstances would have more autonomous mechanisms to access social benefits.
Assessment of the scope of social protection responses: first studies
According to some reports that have been published on the impact of the programs and measures adopted, it is possible to identify how the first installments of emergency transfers have covered the most vulnerable populations in the region. In Argentina, according to the technical report prepared by the Economy, Productive Development and Labor ministries, IFE implementation contributed to reaching 89% of the poorest decile of the population. In Colombia, Ingreso Solidario, which in its first payment benefited a total of 1,147,565 banked people, was able to cover 11% of people in extreme poverty (130,098 people) and 40% considered poor (453,938 people) under the Sisben classification.48
The emergency programs that have arisen in response to COVID-19 can enhance the efficiency of cash transfers and other social protection
48 Argentina, see https://www.argentina.gob.ar/noticias/el-gobierno-oficializo-la-segunda-etapa-del-pago-del-ife ; Colombia: Data published of the beneficiaries in the first installment (Cut-off date: April 17, 2020). More details at: https://ingresosolidario.dnp.gov.co/documentos/Ingreso_Solidario%20_Plenaria.pdf
49 ILO (2020). “Social protection responses to the COVID-19 pandemic in developing countries: Strengthening resilience by building universal social protection”. Social Protection Spotlight. International Labour Organisation: Geneva
components. The possibility that these new and pre-existing programs are monitored and evaluated makes it possible to determine that the results are actually being produced, that the objectives for which they were created are being met, and failures and problems in the existing systems are identified. For example, the dynamism with which governments have had to adapt and adjust their records is recognized. Despite the challenges, this has created an opportunity to validate and update the socioeconomic information of households and individuals, in addition to motivating a deeper debate, both at the conceptual level and in relation to operational advances, on the importance and viability of universal income transfer programs, as in the cases of Brazil, Colombia and Chile. Once the improvement processes have been implemented, social programs will be able to count on rapid processes of inclusion and selection of beneficiaries, all the while allowing to carry out a broader and more efficient allocation of assistance.
3. Social security measures and the labor market in Latin America and the Caribbean
The pandemic generated by COVID-19 prompted authorities to decree contagion containment measures that have had a significant impact on economic activity and on the income security of families. This has affected workers and companies, with the consequent marring of the well-being of children caused by insufficient monetary income to satisfy basic needs and other benefits of the contributory social protection, such as family allowances or levels of health coverage.49 In response, in Latin America and the Caribbean, many governments have implemented ad hoc adaptations to existing social security and
labor market programs, in addition to the introduction of temporary programs aimed at maintaining the workforce, which make it possible to protect formal employment in the short term, inject liquidity to micro, small and medium-sized companies, and establish income compensation for self-employed workers, among other initiatives.
A deep division persists in the region among countries with high coverage levels of the employed population, where it is possible to establish mitigation measures using social security schemes.
Countries in Central America, Mexico and some of the Andean zone present much less social security coverage, which in some cases spurred countries (such as Belize and Costa Rica) to take measures to expand their systems, at least temporarily. This section focuses on the review of the main measures adopted under the contributory pillar of social protection, mainly in relation to unemployment
insurance and pensions, as well as salary subsidies, support for micro, small and medium enterprises (MSMEs) and for independent workers. Therefore, the designs of new programs and adaptations of pre-existing measures that contribute to mitigating the short-term negative impacts of COVID-19 on jobs are spotlighted, with the aim of reducing insecurity and lack of income guarantees of the families.
Labor Market in Latin America
Labor participation rate (2018): 62.4%, with significant gender gaps, because while men have a participation rate of 75%, only 50% of women of working age participate actively in the labor market. Belize, Costa Rica, Cuba, El Salvador, Honduras, Mexico, Panama, Paraguay, the Dominican Republic and Venezuela have participation gaps of more than 25 points between men and women.
Employed population according to productivity sectors (2018): 67% of people employed work in low productivity sectors (services, commerce and agriculture), 24.9% in average productivity (industry, construction, transport and communications), and 7, 9% in high productivity sectors (electricity, mining, water and gas, financial activities). There are important gender gaps; while 79.2% of women are employed in low-productivity economic sectors, among their male counterparts this proportion is 58.3% of workers. The countries that
concentrate more than 70% of people employed in low-productivity economic activities are Guatemala (75.7%), Honduras (73.6%), Nicaragua (75.2%), Paraguay (70.7%) and Peru (71.1%). The countries that have more than 10% of persons employed in high-productivity sectors are Brazil (11.1%), Chile (11.6%), Colombia (10.7%), Costa Rica (13.5%) and Uruguay (11.9%).
The average salary in low-productivity sectors (2018): wage earners in micro-enterprises (establishments with 5 or fewer employed persons) receive, on average, 2.9 poverty lines per person, while the salary of domestic employees was 2.2 times the poverty line for their countries, and unskilled independent workers received a salary 2.7 times the value of the poverty line.
a. Social security policies
The main objective of the contributory pillar of social protection is to provide benefits that make it possible to cope with periods of temporary inactivity (for example, parental leave, illness or unemployment) or permanent inactivity (old age or disability) that prevent full active participation in the labor market, with the consequent risk in income for households. Likewise, contributory social protection implements measures aimed at improving the well-being of families, especially of members who depend on adults, through inclusion in the coverage of benefits and health insurance, as well as being eligible for family allowances that offer income guarantee as subjects with rights.
The information collected as of the beginning of July reported that 24 countries in the region
implemented measures in the area of social security, the most frequent being employment protection programs, early access to severance pay or other salary benefits, and the use of contributory pensions. This section seeks to review the main measures adopted in the region regarding income supplementation, either through new temporary programs or adaptations of existing instruments in the social security systems. There is special interest in unemployment insurance and contributory pensions since these are the most frequent measures implemented and on which governments quickly made adjustments and expansions, either in coverage or in the amounts of benefits.
However, the wide-spread labor informality calls into question the scope of measures based on the activation of social security instruments, which are
usually closely linked to formal employment. This structural gap in social security coverage is a difficult obstacle to surmount in order to facilitate access to the various benefits necessary to overcome the current economic crisis. The labor market in Latin America and the Caribbean is 49.1% informal (urban workers in low-productivity sectors of the
50 ECLAC/ILO. (2020). El trabajo en tiempos de pandemia: desafios frente a la enfermedad por coronavirus (COVID-19). Santiago de Chile: United Nations
labor market), so regular and timely access to contributory benefits depends on adjustments and public financing that allow temporarily extending the contributory social protection benefits that provide some type of income or another guarantee during this emergency period.50
Argentina
In Argentina, during the suspension of face-to-face work, pregnant women and other groups were guaranteed the right to 14 days paid leave. (Resolution 207/2020). Also men and women or persons responsible for the home have justied absence for the care of the child or adolescent during the suspension of school classes (Resolution 207/2020).
Peru
Peru issued Legislative Decree No. 1499, establishing measures to supervise and guarantee the protection of the socio-labor rights of domestic workers. It guarantees protection against violence and harassment in all aspects, among other rights.
Chile
Proposal for a bill: Mothers whose postnatal period expires will be able to access the Labor Protection and Unemployment Insurance Law with an additional 5% benet increase. While the educational establishments are not operating, the parents will have a monthly guaranteed basic of $300,000. Likewise, mothers, fathers or caregivers in charge of children under 6 years of age may access the benets of the labor protection and unemployment insurance law.
Family Policies during COVID-19
Colombia has expanded coverage by making the rules for accessing Severance Retirement more flexible, administered by the Pension and Unemployment Fund Management Companies. Decree 488/202052 establishes that each dependent worker who accredits a decrease in salary by the employer shall have the right to compensate the said loss with withdrawals from the Severance Fund to maintain income stability. Since it is not necessary to be unemployed in order to access these benefits, it can be a case of flexibilization of access conditions.
Severance Insurance
In terms of unemployment insurance, some countries in the region (Brazil, Belize, Chile and Uruguay) have injected public resources into the contributory funds of unemployment insurance, with administrative adjustments and adaptations in relation to coverage and sufficiency of transfers during the emergency period. In addition, especially in countries that lack unemployment insurance or with fairly limited coverage in the formal
52 Government of the Republic of Colombia (2020). Decreto 488 de 2020. Bogotá D.C: Government of the Republic of Colombia. Available at [https://dapre.presidencia.gov. co/normativa/normativa/DECRETO%20488%20DEL%2027%20DE%20MARZO%20DE%202020.pdf]
53 This law is available online at https://www.leychile.cl/Navegar?idNorma=1144080 54 Resolución Ministerio del Trabajo y Seguridad Social 142/2020 del 18/03/2020; Resolución del Ministerio del Trabajo y Seguridad Social 163/020 del 20/03/2020, which
expands the special system of partial unemployment subsidy.
sector, monetary transfers have been made for unemployment in order for people to continue receiving income (total or partial) in the face of reductions in the working day or temporary suspension of the employment relationship. For example, Chile enacted Law 21,22753 that regulates this benefit to which companies apply and which lasts for 3 months. The first salaries are paid with the money from the individual accounts of the unemployment insurance, to later give way to the solidarity fund for the coming months (2nd and 3rd month), maintaining a scheme to decrease the replacement rate.
On the other hand, in Uruguay, applications for activation of unemployment insurance increased over 500% in March 2020, causing the need to establish a special subsidy for partial unemployment.54 The employment relationship between workers and companies continues via actions aimed at subsidizing the payment of suspended contracts, in order to mitigate the impacts of the pandemic on the labor market. The request to
Unemployment insurance
Unemployment insurance seeks to replace labor income in periods of inactivity and is commonly limited to formal work, with financing mechanisms based on bipartite (worker-employer) contributions. In countries with an unemployment insurance system,
adaptations have been made to i) expand coverage through more flexible access conditions (Chile, Colombia, Ecuador, Mexico and Uruguay); ii) increase the amount or type of benefits (Argentina, Mexico and Uruguay), and iii) extend the period during which the insurance can be received (Ecuador).
Unemployment insurance coverage in the region
51 Amorim, Brunu, y Charlotte Bilo. “Seguro-desemprego ao redor do mundo: uma visão geral.” (2019).
In Latin America and the Caribbean, unemployment insurance coverage or another form of compensation for those who have access to the formal labor market is 12.2% of all unemployed workers. Only 8 countries have an unemployment insurance program with government participation: Argentina, Bahamas, Barbados, Brazil, Chile, Colombia, Ecuador, Uruguay and Venezuela. In addition, at least
10 countries (including Cuba, Haiti, Jamaica, Nicaragua, Paraguay, the Dominican Republic and Suriname) do not have any mechanism to protect against unemployment provided in the law, while other 15 (such as El Salvador, Guatemala, Mexico, Costa Rica, Belize, Bolivia, Panama, and Peru) only have severance pay systems.51
In an example at the subnational level, the Government of Mexico City55 has made administrative modifications to its unemployment insurance, expanding coverage to formal workers who do not receive non-contributory
55 The complete legislation of the Mexico City scheme is published in the “Aviso por el que se modifica el diverso por el que se dan a conocer las reglas de operación del programa social “Seguro de desempleo”, for fiscal year 2020, published in la gaceta oficial de la Mexico City, el 31 de enero de 2020, número 274”
cash transfers and have lost their jobs, but who are contributors to social security without having been beneficiaries of unemployment Insurance during 2020.
Table 4 summarizes the measures in the region regarding ad hoc activations of unemployment insurance programs in response to COVID-19. It shows that Argentina, Chile, Colombia and Ecuador adjusted their existing programs, allowing the social security systems to expand the amounts, offer gradual payments or grant values established during the emergency. Mexico City, in turn, illustrates one of the temporary measures adopted to expand unemployment insurance coverage, but only at the local level.
Table 4. Responses to COVID-19: Unemployment Insurance Programs
Country Program
Estimated (P)/ Effective (E)
A Social Security System (National Employment Fund)
Amount Extension Min. $6,000
6 months Monthly
A Unemployment Insurance administrative records
Decreasing rates of replacement rates (Month 1: 70% of salary; month 2: 55%; month 3: 45%; month 4: 40%; and month 5: 35%
3 months 555,002 (Effective for May 2020)
5.7 Monthly
Colombia Mecanismos de Protección al Cesante (Mechanisms for the Protection of Unemployment)
A Administrative records of the Family Compensation Funds
$585,202 (USD 353) Monthly 3 months 663,435 (requests to May 2020)
2.4 Monthly
USD 280 (70% of the unified basic salary)
5 months 20,430 (effective January-March 2020)
0.2 Monthly
Mexico (Mexico City)
Apoyo para personas residentes de la Ciudad de México que perdieron su empleo formal durante la emergencia derivada del SARS-COV2 (COVID-19) (Support for residents of Mexico City who lost their formal employment during the SARS- COV2 (COVID-19) emergency)
N Secretariat of Labor and Employment Promotion of the Government of Mexico City
$1,500 (USD 121) 2 months 33,333 (estimated) Monthly
Uruguay Subsidios de Desempleo Parcial (Partial Unemployment Subsidies)
N Request made by companies to the Social Security Bank
$5,574 (USD 173) and a maximum of $44,606 (USD 1.392)
1 month, but it has been extended twice, until at least June 30, 2020
205,000 (cumulative estimated coverage as of May 2020)
11.6 Monthly
Source: Prepared by the author, based on data published by official sources.
COVID-19 has shown to have devastating effects on the health of older adults, which is why some countries in the region (Argentina, Belize, Brazil, Costa Rica, Cuba, Guyana, Mexico, Peru and Venezuela) have chosen to establish vertical expansions to increase available income in
households with retired members who receive old-age pensions. This will reduce the probability of them having to go out to public spaces for economic reasons given the significant reduction in the household’s labor income, under different modalities.
Access to pension systems in Latin America and the Caribbean
56 ECLAC. (2019). Panorama Social de América Latina 2019. Santiago: United Nations 57 Inter-American Development Bank (2020). Sistema de Información de Mercados Laborales y de Seguridad Social (SIMS).
If the percentage of employed workers who regularly contribute to pension systems is taken into account, access to contributory social protection systems in the region was 40.1% on average for Latin America in 2018. As is a characteristic of this region, the situation differs between the countries, such as the cases of high levels of access to social security (coverage above 60%) in Brazil, Chile, Costa Rica and Uruguay, while, on the other side of the spectrum
are Bolivia, Guatemala, Honduras, Nicaragua, Paraguay and Peru with a coverage of less than 30% of the total employed population.56 Regarding passive coverage, that is, people over 65 who declare receiving a pension (contributory or non-contributory), the average for the region is 57.8%, although countries such as Honduras, El Salvador and Guatemala have coverage less than 15% of the elderly receiving some type of old-age pension.57
In the first place, worth mentioning are the countries that have made additional payments (Cuba and Venezuela) consisting of extraordinary transfers that increase pension amounts. On the other hand, Belize, Brazil, Costa Rica, Guyana and Mexico have chosen to make advance payments that were planned for the coming months. For example, in Mexico, the advance payment equivalent to four months was decreed at the end of March, reaching an amount of $5,240 pesos (USD 421).58 The delivery was made through deposits and personal withdrawal of money with the adoption of measures to maintain social distance between people. In Brazil,59 the advance payment of pensions was implemented with the early delivery of the 13th pension payment for people registered with the General Social Security Scheme. Finally, in the Argentine case, an
58 Presidential Announcement made on March 18, 2020. 59 Ley N. 13.982 de 2 de abril de 2020 60 Emergency Decree 034-2020 61 Law 31,017 promulgated by the Peruvian government on May 1, which allows for up to 25% of pension funds to be withdrawn from individual accounts with a lower
limit of S/4,300 and a maximum limit of S/12,900 (approximately USD 1,250 and USD 4,000, respectively) to mitigate the adverse effects on family economies caused by the mandatory quarantine measures. Applications began to be received on May 18 and the procedure is under the supervision of the Superintendency of Banking, Insurance and AFP.
extraordinary bonus was delivered for low-income pensioners, with a maximum limit of $18,892 pesos (USD 625), considering the bonus and the amount of the pension.
In another example, Peru enacted two initiatives for active workers with the use of funds in individual accounts that are in the process of accumulating balances in the private pension system. In March 2020, the Government authorized an early withdrawal of $2,000 soles (approximately USD 999) for workers with 6 or more months of unemployment.60 Subsequently, Congress approved legislation referring to a second early withdrawal of pension savings.61 Table 5 summarizes the adaptations of the pension programs by country, identifying those that offered increases, made advance payments, additional payments and extraordinary withdrawals.
Country Program Name Increase
Additional payments
Duration
Argentina Bono extraordinario para jubilados/as y pensionados/as (Extraordinary bonus for retirees and pensioners) √ Single payment
Belize Anticipo de un mes de pensión para jubilados (One month advance pension for retirees) √ 3 months
Brazil Antecipação 13º salário para aposentados do INSS (Advance 13th salary for INSS retirees) √ Single payment
Chile Retiros Extraordinarios de fondos de las Cuentas Individuales (Extraordi- nary withdrawals of funds from Individual Accounts) √ Single payment (in
2 installments)
Costa Rica Adelanto en pago de pensiones del presupuesto nacional (Advance payment of pensions from the national Budget) X Single payment
Cuba Prorrogación de pensiones temporales (Extension of temporary pensions) √ 6 months
Guyana Pago anticipado de pensión por vejez (Advance payment of old-age pension) √ --
Mexico Adelanto de pensiones del IMSS (Advance payment of IMSS pensions) √ Single payment
Peru Retiros Extraordinarios de fondos de las Cuentas Individuales del Sistema Privado de Pensiones (Extraordinary Withdrawals of funds from Individual Accounts of the Private Pension System)
√ Single payment
Venezuela Incremento del Ingreso Minimo Mensual y la Protección Social (Increase in the Minimum Monthly Income and Social Protection) √ Monthly
Source: Prepared by the authors.
b. Labor market measures
The particularity of the current economic contraction and unemployment situation occurs due to the speed, depth and uncertainty of its implications on the supply and demand of labor, which muddles the effectiveness of the recovery measures, both in terms of employment and wages. Another aspect that hinders public policy responses to the labor market is the limited fiscal spaces in most countries to succeed in providing a sufficient and comprehensive response.
The need for rapid and effective responses to public labor policy allows us to reflect on the necessary adaptations to serve the different affected groups (such as informal workers and their families, employers, small and medium-sized enterprises,
etc.). In addition, the economic effects of COVID-19 reinforce the need to advance in the socio-labor institutional framework that will facilitate more and more timely responses, relevant and with a greater positive impact on labor supply and demand. In this regard, 8 countries have enacted measures that allow the temporary suspension or reduction of labor relations, ranging from 3 to 12 months long, avoiding the implementation of massive layoffs due to the company’s need. These suspensions occur through partial salary subsidies, either as a direct provision of public spending, or using pre-existing platforms. Said pre-existing platforms, such as the use of unemployment insurance, have been modified to partially supplement the wages of workers who are in some type of reduction or temporary suspension of the employment relationship with the employer.
Telework Regulations and COVID-19
The emergence of the virus that causes COVID-19 has meant a rapid and massive adoption of teleworking measures in the public and private sectors with the aim of preventing contagion and reducing employee mobility while maintaining continuity of work in those sectors in which this option is feasible. The main recipients of this modality are formal salaried employees who have found it necessary to work under this modality, which in normal times would have been a voluntary option subject to terms and conditions.
According to the ILOa, the teleworking establishment must take into account issues regarding the health and safety of workers, especially in relation to the home, not increasing physical and mental health risks compared to the workplace. Likewise, employers must provide the equipment, spare parts, connection and everything necessary for the employees to be able to carry out their tasks from their home without incurring extra expenses or using their own resources. Teleworking must include compensation for accidents that may occur during the exercise of this modality and should be considered in the regulations and agreements between employer and employee. The ILO suggests reviewing accident insurance agreements and adapting them to new needs and contingencies.
During the time of confinement, 20 countries in the region have implemented new regulations or adopted existing ones regarding the obligations and rights of employers and workers in the teleworking
modality. Chile approved a new law in March 2020 establishing the duties of both parties and highlighting that all equipment costs must be borne by the employer (Law 21,220). Paraguay increased coverage through a new intervention to cover private-sector workers. Resolution 471/2020 of the Ministry of Labor, Employment and Social Security orders temporary employment modifications for beneficiaries not to have to conduct their tasks in person and it establishes the possibility of keeping the record and informing the Ministries of the contracts that have been modified to conduct work from home. For its part, Costa Rica adapted the existing law on telework focusing on the dissemination of the regulations, rights and obligations of telework in public administration. In addition, the Government had a technological platform administered by the Costa Rican Electricity Institute that allows holding virtual meetings and calls without incurring costs to the public employee.
Lastly, Argentina is beginning to legislate on teleworking, introducing care tasks as a right to be able to reconcile family and work. Specifically, the bill establishes that the guardianship of children under 13 years of age, older adults or people with disabilities must be accredited so that the adults in charge of their care will have a compatible schedule between said tasks and their working day. In the event that the employer does not grant such facilities, it will be considered a discriminatory act.
Wage subsidy
Job protection is a key measure to reduce the negative impact on the region’s labor markets: 18 countries have adopted new programs to mitigate job losses caused by the downturn in economic activity by paying the payroll wages, with state participation. Therefore, it seeks to protect workers’ labor income while avoiding job loss. In most cases, subsidies were implemented in new programs, and designed for temporary delivery (as in the cases of Argentina, Belize, Brazil, Colombia, Costa Rica, Cuba, Guatemala, Haiti, Honduras, Jamaica, Paraguay, Peru, and the Dominican Republic). There were also cases in which salary subsidies were granted based on administrative records and existing payment structures, for example, associated with unemployment insurance (Chile, Trinidad and Tobago, and Uruguay).
The application of wage subsidies can take different forms, such as direct transfers to unemployed workers or subsidies delivered to companies for the payment of wages. Also, there are Caribbean countries that have focused on key sectors of their local economy, such as tourism. In other cases (Bolivia, Ecuador, Honduras, Nicaragua and Panama) temporary suspensions of labor contracts or reductions in working hours were decreed without state support for the payment of wages, affecting workers’ purchasing power. The detail of each initiative promoted by the governments of the region is listed in Table 6.
Table 6. Responses to COVID-19: modalities for wage subsidies in Latin America and the Caribbean
Country Program Name Wage Subsidy Modality Targeting economic
sectors
Transfer to companies for salary subsidies
10.6 Up to 12 months
Belize COVID-19 Unemployment Relief Program Direct transfer to workers X 22.1 2 months
Brazil Beneficio Emergencial de Preservação do Emprego e da Renda – Bem (Emergency Employment and Income Preservation Benefit)
Transfer to companies for salary subsidies
4.2 3 months
46.4
Colombia Programa de Apoyo al Empleo Formal – PAEF (Formal Employment Support Program)
Transfer to companies for s

social protection and response to covid-19

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