Social Protection in Transition Countries: Emerging Issues

IMF Policy Discussion Papers, May 1, 1996

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Canonical URL: Social Protection in Transition Countries: Emerging Issues

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Bibliographic details

Authors: Sanjeev Gupta, Ke-young Chu
Published: May 1, 1996
Series: IMF Policy Discussion Papers
DOI: https://doi.org/10.5089/9781451972535.003

Overview and Purpose

Authors: Sanjeev Gupta, Ke-young Chu
Date: May 1, 1996
Series: Policy Discussion Paper No. 1996/005
Issue: 005
Volume: 1996
Pages: 29
DOI: https://doi.org/10.5089/9781451972535.003
ISBN: 9781451972535
ISSN: 1564-5193
Type: Paper on Policy Analysis and Assessment

Key Findings on Social Protection Challenges

The formal sector is shrinking, and unemployment and underemployment are rising rapidly.
These labor market changes are affecting both:
- the revenue base of social protection programs, and
- the ability of transition countries to target social benefits.
Financial and administrative capacity of countries undergoing economic transition is weakening.

Analysis and Implications

Weakening revenue bases undermine sustainability of existing social protection programs.
Deteriorating administrative capacity reduces effectiveness of targeting mechanisms for benefits.
Rising unemployment and underemployment increase demand for social protection while shrinking payroll-tax-funded resources.

Policy Recommendations

Restructure social benefits to adapt to altered labor market and fiscal conditions.
Rely more on self-targeting mechanisms to deliver benefits.
Take immediate steps to improve payroll tax compliance.

Subjects and Keywords (as provided)

Subjects: Aging, Expenditure, Income, Labor, National accounts, Payroll tax, Pension spending, Pensions, Population and demographics, Taxes, Wages
Keywords: Aging, Baltics, country, earnings history, Eastern Europe, government, government cash benefit, Income, Payroll tax, PDP, Pension spending, retirement age, sector wage, transition country, wage, wage bill, wage fund, Wages

Source: IMF Policy Discussion Papers — Social Protection in Transition Countries: Emerging Issues, Sanjeev Gupta and Ke-young Chu, May 1, 1996 (Policy Discussion Paper No. 1996/005).