Social Protection and Sustainable Employment

Most workers in low-income countries are living in poverty, and while many economies are seeing significant growth, much of it is ‘jobless’ or depends on poorly remunerated work. Low and middle-income countries are dominated by informal employment. In most low and middle income countries, coverage of social protection for those outside the labour market (or the working poor within it) is also limited.

This report explores how and when social protection contributes to sustainable employment and reliable increases in income for poor households in middle and low-income countries. It looks at the role of social protection — actual and potential — in achieving sustainable employment. It argues that with high levels of working poverty the main challenge is the poor quality of most employment rather than a lack of employment per se. Policies must therefore address not only the creation of jobs but also the quality of jobs.

Social protection can make a potentially significant contribution to sustainable employment. However, in practice, most social protection programs are not delivered at a large enough scale, over a long enough timeframe and with enough predictability and reliability to achieve the potential effects. There is strong evidence that cash transfers increase both the level and quality of poor people’s labour market participation and their own livelihood activities in most cases, but that they reduce labour market participation precisely when and where they should — in the case of children and the elderly.