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This paper provides an overview of the design of means-tested Guaranteed Minimum Income schemes, which constitute an important component of social protection systems in European countries. It discusses how key design features differ across countries, including how countries balance the primary objective of poverty alleviation against the desire to both manage the work disincentives inherent in such programs and contain fiscal cost. The analysis finds a clear trade-off between both concerns in practice, with many countries combining low generosity with low benefit withdrawal rates (BWRs) thus prioritizing employment incentives over the primary objective of poverty alleviation. Many countries can reduce this trade off by combining higher generosity with higher BWRs. Countries with very high BWRs should consider reducing these, including through allowing income disregards and time dependent (rather than income-dependent) benefit withdrawal. The work disincentives associated with higher BWRs can also be attenuated through strengthening complementary activation policies that incentivize and support participation in the labor market.
Examining the increasingly relevant topic of public sector efficiency, this dynamic Handbook investigates the context of constrained fiscal space and public funding sources using cross-country datasets in areas including China, India and sub-Saharan Africa and OECD economies.
Universal basic income (UBI) is emerging as one of the most hotly debated issues in development and social protection policy. But what are the features of UBI? What is it meant to achieve? How do we know, and what don’t we know, about its performance? What does it take to implement it in practice? Drawing from global evidence, literature, and survey data, this volume provides a framework to elucidate issues and trade-offs in UBI with a view to help inform choices around its appropriateness and feasibility in different contexts. Specifically, the book examines how UBI differs from or complements other social assistance programs in terms of objectives, coverage, incidence, adequacy, incentives, effects on poverty and inequality, financing, political economy, and implementation. It also reviews past and current country experiences, surveys the full range of existing policy proposals, provides original results from micro†“tax benefit simulations, and sets out a range of considerations around the analytics and practice of UBI.
Belgium: Selected Issues
Social protection programs are crucial for stabilizing household income, especially during crises. Brazil's response to the pandemic, the Auxilio Emergencial (AE) program, demonstrated the value of a resilient social safety net and digital tools. This study assesses AE's effectiveness in income stabilization, poverty reduction, and inequality. Results show that the pre-pandemic social protection system would have only buffered about a quarter of income loss, with unemployment insurance more significant for higher-income households, and social safety net transfers crucial for lower-income households, especially those in informal employment. AE successfully supported lower-income households during the pandemic, but its generosity went beyond the stabilization of income, resulting in large fiscal costs.
Spain has a high share of the working age population at risk of poverty or social exclusion and a high incidence of child poverty. While Spain has introduced a minimum income at the national level, social inclusion policies are the responsibility of the regions.
Targeting is a commonly used, but much debated, policy tool within global social assistance practice. Revisiting Targeting in Social Assistance: A New Look at Old Dilemmas examines the well-known dilemmas in light of the growing body of experience, new implementation capacities, and the potential to bring new data and data science to bear. The book begins by considering why or whether or how narrowly or broadly to target different parts of social assistance and updates the global empirics around the outcomes and costs of targeting. It illustrates the choices that must be made in moving from an abstract vision to implementable definitions and procedures, and in deciding how the choices should be informed by values, empirics, and context. The importance of delivery systems and processes to distributional outcomes are emphasized, and many facets with room for improvement are discussed. The book also explores the choices between targeting methods and how differences in purposes and contexts shape those. The know-how with respect to the data and inference used by the different household-specific targeting methods is summarized and comprehensively updated, including a focus on “big data†? and machine learning. A primer on measurement issues is included. Key findings include the following: · Targeting selected categories, families, or individuals plays a valuable role within the framework of universal social protection. · Measuring the accuracy and cost of targeting can be done in many ways, and judicious choices require a range of metrics. · Weighing the relatively low costs of targeting against the potential gains is important. · Implementing inclusive delivery systems is critical for reducing errors of exclusion and inclusion. · Selecting and customizing the appropriate targeting method depends on purpose and context; there is no method preferred in all circumstances. · Leveraging advances in technology—ICT, big data, artificial intelligence, machine learning—can improve targeting accuracy, but they are not a panacea; better data matters more than sophistication in inference. · Targeting social protection should be a dynamic process.
The International Monetary Fund’s engagement on social safety net (SSN) issues is likely to expand as member countries respond to growing challenges in the economic and fiscal landscape. SSNs play a crucial role in protecting households from poverty, promoting inclusive growth, and maintaining social stability. This technical note discusses (1) the different channels through which SSN spending may become macro-critical, (2) how to assess the importance of these channels, and (3) the types of policy responses that are appropriate and the trade-offs involved in choosing among them. To facilitate a more comprehensive assessment of SSN spending, the paper also examines the complementary role of labor market programs (for example, unemployment benefits and active labor market programs). The paper emphasizes the importance of early engagement and coordination with development partners with expertise on social safety nets and with different stakeholders when formulating policy advice.
The notion that every person living amidst the relative affluence of the rich world has a right to a minimum income enabling social participation, be it frugally and soberly, holds as a fundamental matter of social justice to most people. But how can we make sure that every person has a decent minimum income allowing for a life with dignity in societies rich enough to afford such a right? How can we ensure that minimum income support is cost-effective and compatible with other goals such as promoting work effort, self-reliance, and upward mobility? How can political support for such schemes be fostered and made robust? Zero Poverty Society assesses the current state of minimum income protection in the rich world, building on original empirical analysis. It also engages with debates on topics as diverse as optimal targeting and means-testing, administrative complexity, non-take-up, behavioural economics, the political economy of minimum income protection, and basic income. Marchal and Marx conclude that more adequate poverty prevention is possible, without the costs having to be prohibitive. However, they are sceptical about 'silver-bullet' solutions such as basic income. Adequate minimum income protection is not a matter of getting one scheme or policy right. It is a matter of getting multiple policy levers right, in the right configuration. Incremental, context-conscious expansion is the way forward if we really care about the most vulnerable.
Can entrepreneurship serve as a pathway out of poverty? Are the poor able to create ventures that can improve their economic circumstances and enhance their lives? Poverty, Disadvantage and the Promise of Enterprise: A Capabilities Perspective argue that “it depends”. To understand the poverty and entrepreneurship interface, we must first understand poverty. Using a lens of disadvantage theory and the capabilities framework, the book explores the implications of poverty’s complex, multi-dimensional nature when one is trying to start and grow a business. Four key liabilities directly impact the opportunities these individuals are able to recognize, the types of ventures they create, how the businesses perform, and the impacts on the well-being of the entrepreneur. Because of these liabilities, these ventures tend to fall into what the authors call the commodity trap, where they struggle with low sales volumes and marginal profits. However, the trap is avoidable, and, with the right kinds of support, the performance of these ventures can be meaningfully improved. Key design elements of a successful intervention approach, together with an alternative perspective on the roles of community-based entrepreneurial ecosystems and public policy, are introduced. Emphasis is also placed on the critical roles of faith, hustle, and the fears of both failure and success.