Argentina: Income Support Policies Toward the Bicentennial (World Bank Country Study)

Following the serious economic crisis in 2001 02, Argentina mobilized an unprecedented effort to provide income support to the segment of the population most in need. Now, as growth has returned and social indicators recovered to precrisis levels, there is an opening to move from emergency support programs to a more comprehensive, long-term, and sustainable strategy for social protection. The challenge is to design and fully implement a social protection system that has adequate coverage and benefits and is integrated and fiscally and politically sustainable. The analysis contained in this book aimed to contribute to and inform the debate about the future of income support policies in Argentina, taking the views, values, and preferences of the stakeholders and the population as starting points. The research included two innovative efforts to collect and understand the landscape of ideas regarding options for social protection circulating in Argentina: first, an extensive set of consultations with policy makers and practitioners in social policy, mainly at the provincial level; and second, a national, representative opinion survey on the views and perceptions of the population regarding social policy and income support programs in particular. Contents......Page 3 Acknowledgments......Page 7 Preface......Page 8 Executive Summary......Page 10 Figure 1. Trends in Informality and Poverty, 1992–2006......Page 11 Figure 2. Evolution of Public Expenditures on Income Transfer Programs, 1995–2007......Page 12 What Has Happened since the Crisis?......Page 14 Figure 4. Plan Jefes Exit Paths of Jefes Beneficiaries, 2003–2007......Page 15 Box 1. The Preference for Employment......Page 17 What Is the Potential of Income Support to Reduce Structural Poverty in Argentina?......Page 18 Final Reflections: What Are the Preconditions for Integrated Social Protection?......Page 20 The Report......Page 21 Introduction......Page 24 Definitions: Social Protection and Income Support......Page 25 Table 1.1. Public Expenditure and Other Subitems in Constant Nominal Terms and as % of GDP, 2007......Page 28 The Origins of Income Transfer Programs in Argentina......Page 30 Emergency Response and Current Income Support Policy......Page 37 Table 2.1. Income Transfer Programs in Argentina, 2007......Page 48 3. Opinions and Preferences Toward Income Support......Page 55 Box 3.1. Do Opinion Surveys Matter?......Page 56 Figure 3.1. Objective of Social Programs: Universal Benefit and Family Allowances......Page 60 Figure 3.3. Interaction with Social Programs, 2002–2007......Page 62 Figure 3.5. General Evaluation of Programs (Agreement with the Statement “The Programs Work Well and Should Be Left as They Are”)......Page 64 Figure 3.6. Reasons for Exiting Benefit Programs......Page 65 Conclusions......Page 70 4. Income Support and the Role of the Provinces......Page 73 The Federal Model in Argentina......Page 74 Figure 4.2. Total Social Spending, by Government Level, 2000–2007......Page 77 Income Support Policies at the Provincial and Municipal Levels......Page 80 5. Policy Options and Future Challenges......Page 83 A Typology of Options......Page 84 Table 5.2. Basic Descriptive Statistics for the Urban Population, Second semester 2006......Page 86 Table 5.4. Simulated Scenarios......Page 88 Introducing Behavioral Responses......Page 93 Implementation Challenges......Page 96 6. Reflections, Challenges, and Policy Considerations......Page 98 7. References......Page 101 Appendixes......Page 104 Table A1.1 Distribution of Homes by Region and Surveys Carried Out......Page 106 Selection of Provinces and Key Informants......Page 108 Methodology......Page 109 Appendix C: Methodology of the Behavioral Simulation......Page 110 Table 1. Simulated Policy Impacts......Page 19 Table 2.2. Income Transfer Programs in Argentina—Basic Elements as of 2007......Page 53 Table 5.1. Income Transfers Typology and the Three Visions......Page 85 Figure 5.5. No School Attendance of Beneficiaries, by Age......Page 94 Table A1.2 Distribution of Homes by Strata and Surveys Carried Out......Page 107 Table A3.1 Log Earnings Regression for Reported Earnings of Children Ages 12–18......Page 111 Figure 3. Social Protection Spending at the Provincial Level, 1980–2006 (% of GDP)......Page 13 Figure 5. Evolution of Social Security Benefits......Page 16 Figure 1.1. Evolution of Income Transfer Spending, 1994–2006......Page 29 Figure 2.1. Benefits and Beneficiaries of the Pension System, 1950–2007......Page 31 Figure 2.2. Beneficiaries of the Pension System by Administrator, 1950–2007......Page 32 Figure 2.3. Contributory Resources as a Percentage of Social Security Spending, 1950–2007......Page 33 Figure 2.4. Beneficiaries of the Income Support Programs, 1992–2006......Page 34 Figure 2.5. Pensions and Survivors’ Pensions—Beneficiaries and Average Benefits, 1970–2007......Page 35 Figure 2.6. Family Allowances and Unemployment Insurance—Number of Beneficiaries, 1992–2007......Page 36 Figure 2.7. GDP, Poverty, and Inequality, 1980–2007......Page 38 Figure 2.8. GDP, Unemployment, and Informality, 1980–2007......Page 39 Figure 2.9. Cash Transfer Programs (CCTs and Workfare) from the Federal Government—Number and Amount of Benefits, 1993–2007......Page 41 Figure 2.10 Plan Jefes: Exit paths of Jefes’ beneficiaries, 2003–2007......Page 42 Figure 2.11. NCP—Number and Amount of Benefits, 1989–2007......Page 45 Figure 2.12. Average and Minimum Real Benefits, and Percentage of Beneficiaries Earning the Minimum Benefit, 1977–2007......Page 47 Figure 2.13. Potential Poverty Rate Increase in the Absence of Income Transfer Programs, 1997–2007......Page 49 Figure 2.14. Number of Income Transfers Received by Households—Total and First Quintile, 1997–2007......Page 50 Figure 2.15. Percentage of Households Receiving Program Benefits by Poverty Condition, 1997–2007......Page 51 Figure 2.16. Lorenz Curves for Per Capita Income and Income Transfer Programs, 1997–2007......Page 52 Figure 3.2. Familiarity with Social Programs (Spontaneous and Guided Responses)......Page 61 Figure 3.4. Overall Views on Existing Social Programs (Leave or Replace Them)......Page 63 Figure 3.7. Types of Contraprestaciones......Page 66 Figure 3.8. Preferred Amount of Monthly Plan Jefes Benefit......Page 68 Figure 3.10. The Choice between Jefes and Hypothetical Programs (similar to Familias/Seguro)......Page 69 Figure 3.11. Preferred Characteristics of Social Programs (Submodule)......Page 71 Figure 4.1. Structure of Public Revenues and Expenditures, by Level, 1961–2004......Page 75 Figure 4.3. Participation of Government Levels in Spending on Social Sectors, 2007 (Percent of GDP)......Page 78 Figure 4.4. Provincial Spending on Social Protection, by Sector, 1980–2007 (Percent of GDP)......Page 79 Box 4.1. The Case of Ciudadania Porteña......Page 81 Figure 5.1. Simulation Results for a Transfer to Unemployed People......Page 89 Figure 5.2. Simulation Results for a Transfer to Poor Households......Page 90 Figure 5.3. Simulation Results for a Transfer to Households with Children under 18......Page 91 Figure 5.4. Simulation Results for Family Allowances and a Transfer to the Elderly......Page 92 Box 1.1. Integration of Social Protection......Page 27 Box 2.1. The Transition of Plan Jefes, Familias, and Seguro......Page 44 Box 2.2. The Moratoria......Page 46 Box 5.1. Family Allowances in Uruguay......Page 95 Argentina Approaches Its Bicentennial As An Independent Republic And Has A Window Of Opportunity In Social Protection Policy. Following The Most Serious Economic Crisis In Its History During 2001-02, The Country Mobilized An Effort To Provide Income Support To The Population In Need. Now, As Growth Has Returned And Social Indicators Have Recovered To Pre-crisis Levels, There Is An Opening To Move From Emergency Income Support Programs To A More Comprehensive, Long-term, And Sustainable Strategy For Social Protection. The Emergency Response Was Effective, As It Helped The Country To Overcome The Worst Of The Crisis. The Centerpiece Of The Strategy, Plan Jefes Y Jefas, Provided Benefits To Nearly Two Million Households During A Period When Poverty Affected More Than Half The Population And Unemployment Reached Record Levels. The Number Of Beneficiaries Slowly Declined Beginning In 2003, And Was At Nearly One-third Of Its Maximum Value By Early 2008. This Reduction Was Achieved By The Reentry Of Beneficiaries Into The Formal Labor Market, The Loss Of Eligibility, And The Shift Of Beneficiaries To Familias And Seguro De Capacitacion Y Empleo (seguro), The Successor Programs To Jefes. Now That The Crisis Has Passed, The Policy Debate Has Shifted Toward The Future Of Social Protection Over The Longer Term. The Improvement In Overall Economic Conditions Since 2003 Has Resulted In A Decline In Unemployment, Poverty, And Inequality, And A Recovery Of Formal Employment And Real Salaries To Pre-crisis Levels. These Positive Trends Have Generated Opportunities To Consider Longer-term And Structural Issues, Including A Debate Over The Future Of Whether This New Type Of Noncontributory Social Policies, Based On Income Transfers To Households And Individuals, Should Continue.--publisher's Description. Income Transfer Programs And Social Protection -- Income Support Policies In Argentina : Origins And Development -- Opinions And Perferences Toward Income Support -- Income Support And The Role Of The Provinces -- Policy Options And Future Challenges -- Reflections, Challenges, And Policy Considerations. Includes Bibliographical References. Annotation Following the serious economic crisis in 2001€“02, Argentina mobilized an unprecedented effort to provide income support to the segment of the population most in need. Now, as growth has returned and social indicators recovered to precrisis levels, there is an opening to move from emergency support programs to a more comprehensive, long-term, and sustainable strategy for social protection. The challenge is to design and fully implement a social protection system that has adequate coverage and benefits and is integrated and fiscally and politically sustainable.The analysis contained in this book aimed to contribute to and inform the debate about the future of income support policies in Argentina, taking the views, values, and preferences of the stakeholders and the population as starting points. The research included two innovative efforts to collect and understand the landscape of ideas regarding options for social protection circulating in Argentina: first, an extensive set of consultations with policy makers and practitioners in social policy, mainly at the provincial level; and second, a national, representative opinion survey on the views and perceptions of the population regarding social policy and income support programs in particular