Effectiveness of SP in Fighting Poverty and Inequality Prof Alex van den Heever Chair in the Field of Social Security

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Effectiveness of SP in Fighting Poverty and Inequality Prof Alex van den Heever Chair in the Field of Social Security

SOCIAL SECURITY IS THE ROUTE TO A HEALTHY SOCIETY

Market-related work/employm ent Subsistence work Unremunerated work Leisure Observed GDP Unobserved GDP Total Welfare

Market-related work/employm ent Subsistence work Unremunerated work Leisure Observed GDP Unobserved GDP Total Welfare

Market-related work/employm ent Subsistence work Unremunerated work Leisure Observed GDP Unobserved GDP Total Welfare

Market-related work/employm ent Unremunerated work Leisure Observed GDP Unobserved GDP Total Welfare

Cumulative share of population Cumulative share of income Lorenz curve Structural increase in social risks Structural decrease in social risks

Impacts on Structure of consumption Industrial development Distribution of human capabilities Distribution of welfare/wellbeing Political stability Under normal circumstances the quality of overall social wellbeing is a policy choice and not a function of factors outside the control of governments

Social protection seeks to maximise welfare… No trade-off between well-designed social protection and employment/GDP growth – SP protects the distribution of income – SP protect the distribution of capabilities Inequality will increase structurally in the absence of social protection Economic development will proceed more normally if overall welfare is seen as integral to the growth process The distribution of income does not reflect the distribution of capabilities/contribution to output

Social Protection Floor Universal system – Non-contributory (transfers and in-kind services) Requires income transfers Subject to progressive realisation – Contributory (social insurance) Requires well governed mechanisms Focus on risk pooling Limited income transfer required Protection applies to families with and without adequate incomes

South Africa comparison: percentage of total income earned by the top 10% of income earners Source: World top incomes database: (adjusted)

South Africa comparison: percentage of total income earned by the top 5% of income earners Source: World top incomes database: (adjusted)

South Africa comparison: percentage of total income earned by the top 1% of income earners Source: World top incomes database: (adjusted)

Policy framework Social security Labour market EconomyCapabilities Active labour market policy Conditions of service determination policy Industrial policy Tax regime Regulatory governance Training and skills development Education Healthcare Early childhood development Disability Basic family incomes Loss of employment Healthcare Disability Pensions Non- contributory Contributory Pensions Welfare services Loss of employment Economic growth Special employment programmes

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