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What are the strategies in promoting formal employment Written by CHRISTIAN GAYA Friday, 25 May 2012 06:01 Better access to social security also requires better access to formal employment. To this end, many social security programmes are now proactively contributing to endeavours to increase employment levels. Of course, an essential objective is also to produce healthier social security receipts while reducing the growth in benefits expenditure. Targeted groups addressed by these measures have included the long-term unemployed, social assistance recipients, first-time job seekers, older workers, and people with incapacities. For beneficiaries this sometimes implies the imposition of additional qualifying conditions for instance, the requirement that non-employed persons must actively seek work or see their benefits suspended. Alternatively, in some other programmes the imposition of conditions has been used to discourage undesirable forms of work, for example, child labour. When taken together, these measures can be summarised as having sought to; reduce work disincentives inherent in the design of some social security schemes refocus social security on improving employability, and change the behaviour of employers, administrators, and service providers to encourage the (re)integration of non-active members of society. Many of the above initiatives primarily address the concerns of more advanced economies. A further necessary task is to address social security’s role in developing country labour markets. Over the last decades social security programmes in developing countries have typically focused their energies on the needs of formal economy workers. For administrative and developmental reasons this was deemed appropriate. But today the policy focus is widening. There are two main reasons for this. First, in most developing countries like East Africa Community member countries, employment in traditional, rural, and non-formal activities continues to predominate. Second, the priorities of many people working in traditional, rural, or non-formal activities often differ from those catered for by conventional social security programmes. In practical terms, low, irregular, and often seasonal income patterns or the lack of a fixed business address penalise potential contributors. Therefore, the challenge for social security is to design programs that more readily address the needs of all. Besides providing temporary employment and promoting skills development through public works programs (e.g. India, South Africa), legislative changes can widen coverage to casual, rural, and self-employed workers under social insurance programs (e.g. India, Iran, Turkey). Other steps include designing public schemes for informal-sector workers (e.g. Tunisia) and promoting community-based micro insurance schemes (e.g. Tanzania, Uganda). And tax-financed benefits in some countries of sub-Saharan Africa, Asia, and Latin America are also targeting those most marginal to formal labour markets. Although the estimated global unemployment rate remains stable at around 6 per cent, the last decade has witnessed the share of the global population of working-age in some form of employment decline by 1.2 percentage points to 61.4 per cent. For policy-makers, declining global employment among two population groups is noteworthy. First, the decline has been most pronounced among younger workers aged 15 to 24. Second, women continue to have fewer employment opportunities than men. The dynamic nature of labour markets necessitates that social security is correspondingly dynamic. One necessary response must be to better anticipate labour market evolution through better tracking global trends, especially demographic and economic trends. Similarly, improvements in producing labour market data are essential. And a change in mind set as well as vocabulary is also needed. If flexible or informal work is the employment reality for an increasing number of people, is the term ‘non-standard employment’ still appropriate? Or should we talk rather of a global jobs crisis? Consequently, as identified by the International Social Security Associations (ISSA) 2007 Research Conference, the following policy questions require prioritized attention: Faced with the expansion of ‘non-standard employment’, how can social security better accommodate requirements for collective and individual responsibility? What future challenges will labour markets present for social security?