This study reviews social protection trends and policy responses in Latin America and the Caribbean. In the last two decades, the region has seen reforms of social insurance pensions and health insurance and the rapid expansion of social assistance. These changes have re-shaped social protection in most countries in the region. Nevertheless, significant challenges remain. The implementation and delivery of social assistance programmes require long-term partnerships under the direction of secure and well-resourced public sector agencies.
During the 1980s, the incidence of poverty and vulnerability increased significantly in Latin America and the Caribbean. Social protection measures were truncated, with social insurance schemes accessible only to workers in formal employment and social assistance was largely underdeveloped. During the 1990s, there was a slow and small improvement. Currently, life course factors are an important determinant of poverty throughout the region, but some countries’ policy responses have proved effective in reducing old age poverty. In the last few years, however, the global financial crisis has had a serious impact on the successes of poverty reduction.
Since the 1980s reforms have taken place which have gone some way towards increasing social protection. The reform of social insurance programmes in ten countries in the region has replaced social insurance funds with individualised saving retirement plans. New forms of social assistance have emerged in many countries, primarily non-contributory pension schemes and human development income transfer programmes focused on households in poverty.
- New social assistance programmes are designed to reduce poverty and vulnerability, making the reduction of chronic poverty the cornerstone of social policies.
- Private pension funds have attracted at best a fraction of the labour force, reinforcing the truncated nature of social protection institutions.
- Two-thirds of the labour force in the region remains unprotected.
Social assistance programmes, and especially human development income transfer programmes, have the potential to make a significant contribution to reducing extreme poverty in the region. However, attention needs to be paid to the level of benefits and the duration of support in order for these programmes to be effective. Further:
- It is important to ensure that existing programmes move towards stronger institutionalisation and sustainability. This is particularly true of programmes in low-income countries, where financing and delivery capacity are limited.
- Implementation and delivery of social assistance programmes require long-term partnerships under the direction of secure and well-resourced public sector agencies.
- Urgent attention should be paid to the role and capacity of NGOs. They need to develop commitment and expertise in social protection in order to meet these challenges.
