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EMPLOYMENT GUARANTEE POLICIES: Contributing to Pro-poor Development, Promoting Gender Equality Rania Antonopoulos Tuesday, February EMPLOYMENT GUARANTEE POLICIES: Contributing to Pro-poor Development, Promoting Gender Equality Rania Antonopoulos Tuesday, February 9, 2010 World Academy of Arts and Science e-Conference on the Global Employment Challenge 1

The role of the Markets revisited • Challenge: Sub-prime mortgage crisis in the USA The role of the Markets revisited • Challenge: Sub-prime mortgage crisis in the USA leads to worldwide turmoil in financial markets… • Challenge: International market dynamics lead to the crisis of rising food prices…. • Challenge: demand is insufficient to provide jobs and hire those who need and wish to work; poverty reduction, polarization 2

The role of Government revisited Economic and Social outcomes of Laissez faire, and small The role of Government revisited Economic and Social outcomes of Laissez faire, and small government prove uneven and disappointing • In financial markets it can ameliorate instability and fragility: different rules and regulation is needed • In food production markets it can increase food security: price subsidies of staple foods, stockpiling facilities, Malawi’s subsidies of fertilizers, South Africa rethinking landrights policy • To address unemployment it can introduce an active labor market policy: ELR, EGP, the State as the employer of last resort 3

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Key policy challenge: Poverty Reduction • Earned Income deficits – Low wages – Lack Key policy challenge: Poverty Reduction • Earned Income deficits – Low wages – Lack of employment opportunities (economic growth? …. ) • Government Spending – Social provisioning of goods and services – Social security and protection • Household production through unpaid work – Daily reproduction of human beings – Fills in gaps in social provisioning and income 5

the state as the employer of last resort ? the right to work employment the state as the employer of last resort ? the right to work employment security employment insurance Employment Guarantee Policy the state did not always have institutions in place to be a lender of last resort nor an investor of last resort

Why an EGS, ELR, PWP? The right to work promotes … • Dignity, social Why an EGS, ELR, PWP? The right to work promotes … • Dignity, social inclusion and expanded democracy • Direct and indirect income creation • Direct and indirect job creation • Public and Private Asset creation • Pro-poor growth 7

Why an EGS, ELR, PWP? The right to work promotes … • Change our Why an EGS, ELR, PWP? The right to work promotes … • Change our mentality about growth as the single developmental objective and replace it with pro-poor growth, employment creation, social inclusion, and improvement in the life experience of all people • RESOURSE MOBILIZATION? ? ? LABOUR!!!! But work projects ought to be designed with community participation and with the objective to promote social cohesion and economic development!!! and from my own perspective, that also reduce unpaid work 8

What Is Unpaid Work? • Gaining access to basic inputs for cooking, cleaning, sanitation, What Is Unpaid Work? • Gaining access to basic inputs for cooking, cleaning, sanitation, food processing etc: collecting water, wood etc • Providing Care work: children, elderly, chronically ill etc; • Subsistence Production, family businesses Where? at home and in the public domain 9

Use of time and gender inequalities • Time devoted to sleep, self care and Use of time and gender inequalities • Time devoted to sleep, self care and social activities • Time devoted to earned income • – – – Formal work: wage gap? Informal work : social protection? underemployment, unemployment: inactivity? Time devoted to household production – Unpaid work 10

Total Workload – Earnings Gap: Selected Developing Countries 11 Total Workload – Earnings Gap: Selected Developing Countries 11

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Employment Guarantee Programs -What kinds of jobs and for what types of “projects”? -Who Employment Guarantee Programs -What kinds of jobs and for what types of “projects”? -Who is eligible? For how long? -What is the “cost” of such projects and what are the “benefits”? Financing? Are they inflationary? -Institutional arrangements? Technical expertise? 13

Typology of Direct Job Creation Government Programs • The Right to Work: INDIA NREGA Typology of Direct Job Creation Government Programs • The Right to Work: INDIA NREGA since 2006 • Recognition of structural unemployment during prosperity: South Africa since 2005, Sweden and Australia (1940’s-70’s) • ILO Employment Intensive Infrastructure(since 70’s in many African countries) • Emergency Programmes: Indonesia, Korea, Argentina post 2001 financial crisis, USA (New Deal) • Social Funds: Bolivia (1986), Chile (1975 -1987), Peru (1991) 14

Employment Guarantee Programs SOUTH AFRICA Expanded Public Works Programme (EPWP) Infrastructure sector Environment sector Employment Guarantee Programs SOUTH AFRICA Expanded Public Works Programme (EPWP) Infrastructure sector Environment sector Economic/entrepreneur Social sector 15

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Total Hours Spent on Unpaid Work per Year by Household Type and Gender Ex-homeland Total Hours Spent on Unpaid Work per Year by Household Type and Gender Ex-homeland African Rural Commercial White Household Group Rural Commercial Coloured/Asian Female Rural Commercial African Male Urban Informal African Urban Formal White Urban Formal Coloured/Asian Total Hours Per Year 8, 000, 000 7, 000, 000 6, 000, 000 5, 000, 000 4, 000, 000 3, 000, 000 2, 000, 000 1, 000, 000 0 Urban Formal African 17

Rural Areas in India Types of Community Projects Rural roads and access roads Rural Rural Areas in India Types of Community Projects Rural roads and access roads Rural land development Flood control works Water conservation and water harvesting Irrigation facilities to land owned by poor people and to beneficiaries of land reforms Reactivation of traditional water harvesting and distribution systems 18

EPWP Types of Community Projects Road construction and maintenance Water delivery (unpaid work) Ecological EPWP Types of Community Projects Road construction and maintenance Water delivery (unpaid work) Ecological latrines (unpaid work) Early childhood development (unpaid work) Home and community based care (unpaid work) Environmental water conservation (unpaid work) Prevention of fires 19

EPWP: Social Sector • Social Sector consists of – ECD/Education and – HCBC/Health • EPWP: Social Sector • Social Sector consists of – ECD/Education and – HCBC/Health • High female intensity (60 and 69% respectively) addresses female unemployment in the short run and builds skills in the long-term 20

Background on the Study • Type of Intervention : scaling up Early Childhood Development Background on the Study • Type of Intervention : scaling up Early Childhood Development and Home/Community Based Care • The right to work , the right types of projects? unpaid work and gender issues • Research project on micro-macro impact of scaling up public job creation • South Africa Study: Kijong Kim (Levy Institute), EPWP interviews , Irwin Friedman (Health Trust Fund) and PROVIDE team (Dept. of Agriculture), 21

Policy Simulations • All Existing Types of Projects have the potential to reduce unpaid Policy Simulations • All Existing Types of Projects have the potential to reduce unpaid work and facilitate creation and access to basic services EPWP Working for Water; environment sector (Tsitsikamma 2004/05) EPWP Social Sector (Health Trust Fund) EPWP Infrastructure; Access roads and Water Reticulation (SCIP Engineering Group) • Options for Job allocation scheme Jefes variation by population weights (part time year around) NREGA scheme (100 days) Poverty weights-normalized by population Unemployment weights normalized by poverty incidence • Target population Poor and ultra poor households comprising (50% of the unemployed); “unskilled” wages according to programme stipulations and skilled according to SAM 22

EPWP: Social Sector 23 EPWP: Social Sector 23

The SAM for South Africa • Based on PROVIDE, Dept. of Agriculture • Factors The SAM for South Africa • Based on PROVIDE, Dept. of Agriculture • Factors disaggregated by skill and gender • 26 sectors • 20 types of hhs • 7 exogenous sectors 24

Types of Households 25 Types of Households 25

Impact of EPWP Injection • • • ex-ante evaluation of policy scenarios Direct and Impact of EPWP Injection • • • ex-ante evaluation of policy scenarios Direct and indirect job creation (skill level/gender/sector) Direct and indirect income received by type of hh Depth of poverty reduction GDP growth? Pro-poor growth? Sectoral growth? Fiscal space expansion? Impact of new assets and service delivery for participants and community 26

Simulation Results 9 billion Rand, full time-year around jobs • Direct job creation (1, Simulation Results 9 billion Rand, full time-year around jobs • Direct job creation (1, 2 million) • Indirect job creation: for every 3 EPWP, another one in the economy is created • GDP (+1. 7%), tax expansion (1/3 recovered) • Poverty reduction: pro-poor growth! 27

Costs and Benefits • Social inclusion • Income-Poverty reduction? This depends on the length Costs and Benefits • Social inclusion • Income-Poverty reduction? This depends on the length and duration of jobs, wages and targeting method • Asset poverty reduction!!! • Service delivery!!! • Gender equality in unpaid and paid work • Pro-poor development • Monetary cost: 1% of GDP …. ? 3% of GDP? • Opportunity cost of not mobilizing domestic 28 resources?

Social impacts of this crisis • ILO: 200 m. more working poor • ILO: Social impacts of this crisis • ILO: 200 m. more working poor • ILO: Unemployment to rise by 51 m • World Bank: 53 million more people in poverty This is on top of the 130 -155 million people pushed into poverty in 2008 because of soaring food and fuel prices • Social spending is at risk – decline in state revenues – ODA volatility and financing for MDGs • Rising social unrest • Crisis is expected to lead to greatest security risks 29

A framework to understand the economy and this crisis from a gender perspective Paid A framework to understand the economy and this crisis from a gender perspective Paid formal Financial sector Market Production sector Paid informal Unpaid Work Government Sector Household production sector, plus Care, Reproduction and fulfillment of basic needs of people 30

A framework that can lead to a different path of development Neglect of domestic A framework that can lead to a different path of development Neglect of domestic demand, reliance on exports, commodity chain production Washington Consensus, Inflation targeting Deficits, IMF, Social spending? ? ? Financial sector Financial market Liberalization Functional Distribution of Income ? Market Production sector Government sector Household production, Reproduction and fulfillment of basic needs of people 31

Thank you Thank you

Appendix 33 Appendix 33

EPWP: Working for Water 34 EPWP: Working for Water 34

EPWP: Working for Water 35 EPWP: Working for Water 35

EPWP: Infrastructure, Water Reticulation • A sample of EPWP infrastructure projects needed. • Data EPWP: Infrastructure, Water Reticulation • A sample of EPWP infrastructure projects needed. • Data sources (a) cash flow information of Makhwilema Construction Company on a water reticulation contract-Tweenfontein B. (b) a tender submitted for a bulk water master plan for Jackaroo Ringfeed by SCIP Engineering Group. 36

EPWP: Infrastructure 37 EPWP: Infrastructure 37

EPWP: Social Sector • Social Sector consists of ECD/Education and HCBC/Health • High female EPWP: Social Sector • Social Sector consists of ECD/Education and HCBC/Health • High female intensity (60 and 69% respectively) addresses female unemployment in the short run and builds skills in the long-term • Data source: Friedman, Irwin, Bhengu, L. , Mothibe, N. , Reynolds, N. , and Mafuleka, A. , (2007) Scaling up the EPWP, Health Systems Trust, November, Volume 1 -4. Study commissioned by Development Bank of South Africa and EPWP. 38

EPWP: Social Sector 39 EPWP: Social Sector 39

EPWP: Social Sector Matching Gender Decomposition 40 EPWP: Social Sector Matching Gender Decomposition 40

EPWP: Social Sector 41 EPWP: Social Sector 41

Matching input composition to SAM 42 Matching input composition to SAM 42

Simulation Results: comparisons across projects • Direct job creation • Indirect job creation • Simulation Results: comparisons across projects • Direct job creation • Indirect job creation • GDP, pro-poor growth, tax-base expansion • Poverty reduction for participating households (job allocation acc to two diff methods) 43

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Poverty impact 47 Poverty impact 47

Poverty impact 48 Poverty impact 48

Job creation due to an additional expenditure of one million dollars in the US Job creation due to an additional expenditure of one million dollars in the US stimulus package ($USD) Green Energy* Number of jobs created Infrastructure 17 11 Social Care 24 Distribution of jobs created by level of education High School or less 8 8 16 Some college 5 1 4 4 2 3 17 11 24 College Graduate Total 49

www. economistsforfullemployment. org member institutions. . . we are. . . a group of www. economistsforfullemployment. org member institutions. . . we are. . . a group of economists working towards building a global informal network of academics, policy advisors, institutions, advocates and members of government, committed to the realization of the right to work… we are committed to. . . joining forces with all who foster public dialogue and seek to promote employment guarantee around the world. Together, we can provide coherent, viable policy alternatives that lead to 50 inclusive and just outcomes for all…

We aim to… ØPromote public dialogue and build towards a worldwide campaign ØLeverage and We aim to… ØPromote public dialogue and build towards a worldwide campaign ØLeverage and influence the policies and programs of development agencies and financial institutions for improved employment outcomes. ØBuild communities of learning and foster public awareness on existing country level experiences. ØEngage in teaching and policy oriented research ØExplore linkages between development, poverty reduction and macroeconomic coordination policies 51

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