The Social Protection Index: Assessing Results for Asia and the Pacific

This report analyzes comprehensive 2009 data on government social protection programs in 35 countries in Asia and the Pacific. ADB used its Social Protection Index to help assess the nature and the effectiveness of these programs, as well as to facilitate cross-country comparisons.

This project based its activities on the definition of social protection in ADB's 2001 Social Protection Strategy as a "set of policies and programs designed to reduce poverty and vulnerability by promoting efficient labor markets, diminishing people's exposure to risks, and enhancing their capacity to protect themselves against hazards and interruption/loss of income." Strengthening social protection represents a priority contribution to achieving inclusive growth, one of the three main pillars of ADB's Strategy 2020.

This report divides social protection into three major categories: social insurance, social assistance, and labor market programs:

• Social insurance uses contributory schemes to help people respond to common risks, such as illness, old age, and unemployment. Its major components are health insurance, pensions, and unemployment insurance.
• Social assistance provides unrequited transfers to groups, such as the poor, who cannot qualify for insurance or would receive inadequate benefits from such a source. The major components of social assistance are cash or in-kind transfers, child welfare, assistance to the elderly, health assistance, disability benefits, and disaster relief.
• Active labor market programs help people to secure employment. Their major components are skill development and training programs and special work programs, such as cash- or food-for-work programs. This report categorizes passive labor market programs, such as unemployment insurance or severance payments, as forms of social insurance.

Results

The Social Protection Index results suggest that, despite steep GDP gains in recent decades, the majority of countries in Asia and the Pacific—particularly those that have graduated to middle-income status—have not correspondingly strengthened their systems of social protection. They need to scale up and broaden these systems. Spending that corresponds to 20% of poverty-line expenditures or 5% of its GDP per capita—as in the Republic of Korea—is a reasonable strategic target.

Broadening the coverage of social insurance would be an important contribution to this effort. In general, women do not share equitably in the benefits from social insurance. And very few poor households are able to gain access to such contributory schemes. But even large segments of the nonpoor, especially those working in the informal sector or in small enterprises, are not covered by such forms of insurance.

Because social assistance benefits the poor and women much more than social insurance, increasing its depth (its average benefits) should also be a priority. Strengthening programs of cash transfers and child welfare, the two most important forms of social assistance, could make a significant difference. However, improving disaster relief, which has continued to increase in importance, should now be regarded as a major priority. Also crucially needed are improvements in disability benefits, which remain woefully inadequate across most countries.