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Employment and Social Protection Policies for Social Cohesion

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Abstract:

Labour market outcomes and social protection are important determinants of social cohesion. Shifting wealth has altered the challenges for employment and social protection. Although it has created opportunities, it has also led to disruption in the form of changing functional distributions of income, tense labour relations, and changes in the risks faced by citizens. Looking at labour market and social protection challenges from the point of view of social cohesion calls for examining labour market institutions and social protection systems not only in terms of efficiency, but also their ability to prevent or mitigate duality and segmentation. Labour market institutions need to evolve to better accommodate the transformation in labour markets if they are to fulfil their price‐setting and allocative roles and so produce fair outcomes that are achieved with minimal strife. Social protection systems that are segmented into social assistance for the poor and social insurance for formal workers risk leaving a missing middle among vulnerable but non‐poor informal workers. A holistic approach that considers social protection systems in their entirety as well as their interactions with labour market outcomes helps identify such gaps and leads to different choices in programme design.

Document Type: Review Article

Publication date: November 1, 2011

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