1. Labour Markets: Security and Social Protection in the Informal Sector Complementary Comments by Johannes Jütting Development Centre, OECD, Paris ABCDE conference, Amsterdam, May 23, 2005

2. Outline Relevance of the topic Additional perspective: health security
3) Conclusions and outlook

3. 1) Relevance of the topic
Increasing Interest
OECD-DAC countries: POVNET’s work on pro-poor growth
World Bank: Social risk management approach
ILO: Global Campaign on Social Security and Coverage for All
New Insights
Risk and vulnerability as impediments to pro-poor growth
Emerging knowledge on pro’s and con’s of various social protection instruments
Evidence on determinants of participation in different social protection schemes

4. 2) Additional perspective: health security
Health risks the most important risk for the poor in developing countries
Community financing schemes reaching out to the informal sector and rural areas:
From micro-finance to micro-insurance
Positive impact for members reported: financial protection, access to health care
Similar participation patterns and problems of exclusion

5. Weak /Reduction in labour supply
Costs of Illness
Direct Costs
Indirect Costs
Financial Costs
Time Costs
Sale of Livestock
Sale of Asset
Weak /Reduction in labour supply
- Reduced productive capacities
- Reduced credit worthiness
Less chance to hire out or hire in labour
Low level of Productivity / income
Source:Asfaw 2003 5

6. 3) Conclusions and outlook
Emerging consensus on:
Crucial role of social protection in the informal sector for pro-poor growth/achieving the MDG’s
Labour and employment creation a core element
Limits of public provided social protection
“Optimal” public social protection policies, differ
According to the specific context (between countries and regions)
According to the type of risk covered
According to strength and weaknesses of non-state provided social protection

7. 3) Conclusions and outlook
Conceptual framework needed
Impact of policies/instruments on labour market outcomes and social protection
Costs and benefits of different social protection instruments
Interaction effects, e.g. crowding out of private arrangements through public policies
Political economy considerations
Who will implement reforms?
What are the determinants for success?
Social dialogue and ownership