## 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](https://www.imf.org/en/publications/imf-policy-discussion-papers/issues/2016/12/30/social-protection-in-transition-countries-emerging-issues-2013)

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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

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### 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).*

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_Source: https://www.imf.org/en/publications/imf-policy-discussion-papers/issues/2016/12/30/social-protection-in-transition-countries-emerging-issues-2013_