Social security: Issues, challenges and prospects

1 ContentsIInternational Labour Conference89th Session 2001 Report VISocial security :Issues, challenges and prospectsSixth item on the agendaInternational Labour Office GenevaSocial security : Issues, challenges and prospectsIIISBN 92-2-111961-0 ISSN 0074-6681 First published 2001 The designations employed in ILO publications, which are in conformity with United Nations practice, andthe presentation of material therein do not imply the expression of any opinion whatsoever on the part of theInternational Labour Office concerning the legal status of any country, area or territory or of its authorities,or concerning the delimitation of its to names of firms and commercial products and processes does not imply their endorsement bythe International Labour Office, and any failure to mention a particular firm.

2 Commercial product or processis not a sign of publications can be obtained through major booksellers or ILO local offices in many countries, ordirect from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland. A catalogueor list of new publications will be sent free of charge from the above in SwitzerlandATAC ontentsIIICONTENTSP agesINTRODUCTION.. 1 CHAPTER prospects for Social security .. 3 The global context .. 4 Social security and decent work .. 8 Some key issues .. 9 Social security , employment and development .. 9 Extending the personal coverage of Social protection .. 10 Contributing to gender equality.

3 10 Sustainable financing for Social protection .. 10 Expanding Social dialogue .. 11 The aim of the report .. 11 CHAPTER security , employment and development .. 12 The Social and economic impact of Social security .. 12 Social security expenditure, unemployment and growth .. 13 Productivity and Social stability .. 15 Employer contributions and international competitiveness .. 16 Unemployment benefits, unemployment and employment .. 18 Early retirement .. 19 Unemployment benefits and employment promotion .. 19 Relevant international labour standards .. 20 Industrialized countries .. 20 Middle-income developing countries .. 21 Other developing countries.

4 22 Conclusions: Linking Social security with employment and development policies23 CHAPTER the personal coverage of Social protection .. 25 The right to Social security .. 25 The problem of non-coverage .. 26 Policies to achieve the extension of coverage .. 27 The economic, Social and political context .. 28 Strategies for extending Social protection .. 28 Conclusions .. 35 Social security : Issues, challenges and prospectsIVCHAPTER equality .. 37 International labour standards and gender equality .. 38 The link between Social protection and gender .. 39 The impact of labour market inequalities on different forms of Social protection . 39 Measures to grant equality of treatment in Social protection and to promote genderequality through Social protection.

5 40 Survivors pensions .. 41 Divorce and pension splitting .. 42 Pensionable age .. 42 Pension credits for persons with caring responsibilities .. 44 Sex-differentiated annuity rates .. 44 Parental leave and benefits and childcare services .. 44 Child benefit .. 45 Conclusions .. 46 CHAPTER financing of Social security .. 47 Global trends in Social security expenditure .. 47 Social security and its main challenges .. 48 Does Social security face an ageing crisis? .. 50Or does Social security face a globalization crisis? .. 50 Has Social security reached the limits of its affordability? .. 51 National financing options .. 52 Financing systems .. 52 The indispensable role of government as ultimate financial guarantor.

6 57 Globalization and Social security financing .. 58 Conclusions .. 59 CHAPTER and expanding Social dialogue .. 61 Actors in Social protection .. 61 Family and local solidarity networks .. 61 Institutions of civil society .. 62 Enterprises and the commercial market .. 62 Government and Social security institutions .. 63 The international community .. 63 Partnerships for Social protection .. 64 Enhancing the effectiveness of Social security .. 64 Towards Social protection for all .. 66 Conclusions .. 69 CHAPTER for future ILO work .. 70 Research and policy development .. 70 ContentsVProviding a normative framework through standard setting .. 72 Technical cooperation and other means of action.

7 74 SUGGESTED POINTS FOR DISCUSSION.. 77 STATISTICAL ANNEX.. 79 Introduction1 INTRODUCTIONIn 1999 the Governing Body of the International Labour Office decided that ageneral discussion on Social security should take place at the International LabourConference in 2001. The objective of this discussion is to establish an ILO vision ofsocial security that, while continuing to be rooted in the basic principles of the ILO,responds to the new issues and challenges facing Social security . In a second stage thismay lead to the development of new instruments or to the possible updating or revisionof existing the last two decades specific aspects of Social security have been discussedat the International Labour Conference on various occasions.

8 Most recently, in 2000,the Conference looked closely at the subject of maternity benefits when it revised theMaternity Protection Convention (Revised), 1952 (No. 103), and Recommendation(No. 95). Unemployment benefits were on the agenda in 1987 and 1988 when theEmployment Promotion and Protection against Unemployment Convention, 1988(No. 168), was discussed and adopted. In 1987 the Social security (Seafarers) Conven-tion (Revised) (No. 165) was adopted. The special needs of migrants were taken intoaccount with the adoption in 1982 of the Maintenance of Social security Rights Con-vention (No. 157).However, it was in the 1950s with the adoption in 1952 of the Social security (Minimum Standards) Convention (No.)

9 102) and the 1960s with the adoption ofa series of superior standards that the Conference dealt with the broad range ofbenefits provided by Social last opportunity that the Conference had to consider Social security as a wholewas at the 80th Session in 1993 in the discussion of the Report of the Director-General, Social insurance and Social protection. That discussion confirmed the bleak pictureconcerning the developing countries painted in the Report. The unfavourable situationof women with regard to Social protection was emphasized, as was the Social distresswhich had resulted from structural adjustment policies. Some delegates had found theReport s analysis too optimistic with respect to the industrialized countries, noting thatsocial protection was deteriorating, very often at the expense of the most vulnerablegroups of the population.

10 The Social problems in the economies in transition werestressed: to ensure a smooth economic transformation and the development of democ-racy, it was vital to strengthen Social protection. Many spoke about the relationshipbetween economic growth and Social protection, but it was clear that views differedconsiderably on this Governing Body has identified a number of key issues that should be takeninto account in the general discussion in 2001. These include: the interconnectionsbetween Social security , employment and development; extension of the personal cov-erage of Social protection; gender equality; the financing of Social security ; expanding1 See ILO: Governing Body document , 274th Session, Geneva, March security : Issues, challenges and prospects2social dialogue; and implications for future ILO In this report a chapter is de-voted to each of these topics.