Equitable financing and solidarity

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Ensuring the equitable and sustainable financing of national social protection schemes is one of the key challenges for policy makers. ILO Recommendation No. 202  underlines the principles of solidarity in financing as well as financial, fiscal and economic sustainability with due regard to social justice and equity.

Social protection systems can only guarantee protection for all members of society, if appropriate risk pooling and redistribution mechanisms are in place, as a matter of solidarity between the healthy and the sick, between economically active age groups and elderly and children, between those with well-paying jobs or high incomes and those without employment or with very low incomes. Solidarity in financing across all members of society cannot be achieved without considering a diversity of financing mechanisms for social protection provisions, either by subsidising non-contributory schemes for those who are unable to contribute or have low and incomplete contributory histories, or by setting up non-contributory schemes. In fact, many countries, such as Brazil, Ghana and Thailand, have used a combination of social security contributions and taxation (partly supported by external resources) to extend social coverage to larger groups of the population with a view to achieving universal protection.

Photo credit: “Borrowers’ group in Indonesia” by waterdotorg (CCBY 2.0 via Flickr).

Expert Commentaries

Overcoming Precarity and Ensuring Social Protection: What Role for SSE?

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Legal Instruments

Social Security (Minimum Standards) Convention, 1952 (No. 102)

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Social Protection Floors Recommendation, 2012 (No. 202)

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Legal Cases

Adoption of principles of collective financing and social solidarity in Bolivia

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Austerity measures that contravene Conventions by reducing social protection and increasing poverty in Greece

Recalling previous recommendations, the Committee observed that the austerity measures in conjunction with the continuous contractions of the economy, employment and public finances posed a threat to the viability of the Greek national social security system, resulting in the impoverishment of the population, thus undermining the application of all accepted parts of Social Security (Minimum […]

Resources

Measuring financing gaps in social protection for achieving SDG target 1.3. Global estimates and strategies for developing countries

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The State of Social Enterprises in Sri Lanka

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Developing an Inclusive and Creative Economy: The state of social enterprise in Indonesia

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The State of Social Enterprise in Kenya

In Kenya, where the youth unemployment rate is 25 per cent, 65 per cent of all social enterprises seek to create employment opportunities and the sector provides significant leadership opportunities for young people and women. Moreover, one in ten Kenyan social enterprise operates internationally.

Activist to Entrepreneur: The role of social enterprise in supporting women’s empowerment in the US

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Paradigm Trap: The development establishment’s embrace of Myanmar and how to break loose

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Income Inequality and Labour Income Share in G20 Countries: Trends, impacts and causes

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Why Macroeconomic Policy Matters for Gender Equality

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Social Budgeting

The first part of the book provides guidance for designing a social accounting system. The second part shows how the relationships between the economy and the social protection system can be translated into a quantitative model which permits projections and simulations to be carried out. Includes two concrete country applications. Link to this page

Social Protection and Human Rights