Enhancing Social Cohesion: The Role of
of Inclusive Policy Tools and Social
Dialogue
Social Dialogue for Development
Brussels, 18 November 2016
Alexandre Kolev
OECD Development Centre
2
Why the Need for Inclusive Policy Tools and
Enhanced Social Dialogue?
Rising sentiments backed up by alarming evidence that the
fruits of growth are not being equally shared and that
decision making processes is often captured by the elite
Issues of inclusion and equality high in the Agenda 2030
Growing country demand for actionable, timely and forward
looking evidence-based policy advice to support more
inclusive policy making and to monitor and address the
social impact of structural transformation
Policy reforms, however well-designed, are unlikely to be
sustainable, or even implemented, without full country
ownership, supported by a large degree of national
consensus
3
Exemples of OECD Inclusive Policy Tools that
foster social dialogue
Policy Tools Objectives Related SDGs
Social Cohesion Policy
Review
Help countries improve their economic and social policies for
better social cohesion. The review process brings together all
relevant stakeholders for a broad-based dialogue on social
cohesion.
10.1;10.2; 10.3;
10.4; 11.3; 5.1; 5.5;
8.5; 16.3; 16.7
Social Protection
System Review
Support countries’ efforts to extend and reform their social
protection systems from an holistic perspective (social
assistance, social insurance and labour market programmes)
and with particular attention to questions of sustainability and
policy coherence within the social protection sector, as well
as with other relevant policy areas.
1.3; 3.8; 5.4; 10.4
Youth Well-Being Policy
Review
Help countries identify key reforms needed to help youth get-
off to a better start in life. The reviews consider a broad range
of youth well-being outcomes in areas sycha s educaiton,
employment, health and participation
2.2; 4.1; 4.3; 4.4;
4.6; 8.5; 8.6
Multi-Dimensional
Country Review
Design policies and strategies that promote development in a
holistic sense, and do not simply promote growth. This takes
into account the complementarities and interactions across
policies and in doing so helps to identify the sequencing of
policies needed to remove binding constraints to sustainable
development and well-being improvements
1;7;8;9
4
How Can Such Policy Tools Foster an Enhanced
Social Dialogue in Partner Countries?
Inclusive policy tools can help the social dialogue in partner
countries in many ways:
Feed the social dialogue - when it already exists - with
evidence An evidence-based social dialogue can enrich the quality of such
dialogue
Create a space for the social dialogue Technical and policy workshops to discuss findings and identify
policy options are a unique opportunity for social partners to voice
their opinions
5
Examples of analytical tools relevant for
inclusive policy making
Tools for social monitoring 1. Growth incidence curves
2. Employment intensity of growth
3. Income mobility
4. Skills mobility
5. Children’s educational aspiration
Tools for asssessing distributive impacts
6. Labour productivity and wage growth
7. Incidence analysis of taxes and transfers
8. Incidence analysis of fiscal transfers
Simulation tools9. Simulating the economic gains of gender parity in social institutions
6
Social Monitoring for the policy dialogue:
Exemple #1:
Who has benefited from past growth?
The estimation of growth incidence curves (GICs) is a simple and useful
way to identify the extent to which both poorer and richer households have
benefited from growth
Country ACountry B
7
Social Monitoring for the policy dialogue:
Exemple #2:
Has growth translated into an increase in job opportunities?
What makes growth “job rich”?
The employment intensity (IE) of growth is useful to measure how
employment varies with economic output. Identifying its determinants
through cross country econometric analysis has important policy
implications. Yet, this indicator says nothing on the quality of employment.
0
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90
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1
employment-to-population ratio, %employment elasticity
Employment Elasticity Employment-to-population ratio
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Social Monitoring for the policy dialogue:
Exemple #3
Who are moving up or down the income ladder?
When panel data are available, one can measure upward and downward income
mobility and estimate the factors correlated with upward/downward income mobility
to identify who are the “winners” and “losers” in society.
Upward and downward absolute income mobility in Vietnam, 2004-08
Source: OECD 2014. Norte: Absolute income mobility refers to change in adult equivalent income of 20% or more of initial income.
0
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20
30
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50
60
70
80
90
100
Kinh andHoa
Ethnicminorities
Urban Rural I II III IV V
National Ethnicity Residence Quintile
%
Increased Stable Decreased
9
Social Monitoring for the policy dialogue:
Exemple #4 Do workers have opportunities to upgrade in jobs requiring
higher levels of skills?
When panel data are available, one can measure upward and downward
skill mobility and identify the extent to which unskilled workers can upgrade
in jobs requiring higher levels of skills.
Changes in skill level of the job in Vietnam between 2004 and 2008
Source: OECD 2014. Norte: Absolute income mobility refers to change in adult equivalent income of 20% or more of initial income.
0
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20
30
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100
Unsk
illed
Skille
d man
ual
Skille
d non
-man
ual
Unsk
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Skille
d man
ual
Skille
d non
-man
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Unsk
illed
Skille
d man
ual
Skille
d non
-man
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Unsk
illed
Skille
d man
ual
Skille
d non
-man
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Unsk
illed
Skille
d man
ual
Skille
d non
-man
ual
Unsk
illed
Skille
d man
ual
Skille
d non
-man
ual
Unsk
illed
Skille
d man
ual
Skille
d non
-man
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Unsk
illed
Skille
d man
ual
Skille
d non
-man
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Unsk
illed
Skille
d man
ual
Skille
d non
-man
ual
Unsk
illed
Skille
d man
ual
Skille
d non
-man
ual
All Age 15-24 Age 25-44 Age 45-55 Female Male Kinh andHoa
Minority Rural Urban
Change to anothe level of qualification, in %
Level of qualification of the job in 2004
Skilled non-manual Skilled manual Unskilled
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Changes in children’s educational aspirations in Vietnam, 2002-2009
Source: OECD DEV staff calculations based on Young Lives Vietnam data.
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15
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2002 2006 2009
Years of schooling
A. Children's aspirations by ethnicity
Ethnic minorities Kinh and Hoa
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12
13
14
15
16
2002 2006 2009
Years of schooling
B. Children's aspiration by household income quartile
Q1 (poorest) Q2Q3 Q4 (richest)
Social Monitoring for the policy dialogue:
Exemple #5: What drives children’s educational aspirations?
Monitoring children’s educational aspiration over time and identifying the
factors that affect such aspirations is key to fostering inter-generational
mobility.
Assessing the distributive impact of policies:
Exemple #6:
Colombia China
50
100
150
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350
400
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96
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98
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Wage Labor productivity
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Wage Labor productivity
Are workers benefiting from gains in labour productivity?
Changes in real wages are the most direct route through which labour productivity
affects living standards. Comparing changes in average real wages and average
labour productivity indicates the extent to which companies and the people who
own and run them are able to pass on the benefits and lift the living standards of
the average worker.
12
Measuring income inequality before and after taxes and public transfers is a simple
way to assess the extent to which fiscal policy play a redistributive role.
Inequality before and after taxes and transfers (Gini coefficent)
Sources: Viet Nam: own calculation based on VHLSS, 2012; Argentina, Chile, Mexico and Peru: OECD, 2008; remaining countries OECD, 2013.
0
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50
60
Inequality after taxes and transfers Inequality after taxes (and before transfers) Inequality before taxes and transfers
Assessing the distributive impact of policies:
Exemple #7Are taxes and public transfers reducing income inequality?
13
Equitable fiscal transfers from central government to sub-national governments is
an important element of the social contract and can be assessed by looking at the
relationship between fiscal transfers and measures of poverty rates at sub-national
level.
Fiscal transfers and poverty rates by provinces in Vietnam, 2003 and 2009
Sources: 2003 provincial poverty rates: Nguyen, 2009; 2009 provincial poverty rates: Lanjouw et al., 2013; Fiscal transfers: MoF, 2013.
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
0 10 20 30 40 50 60 70 80 90 100
Transfers, million VND
Provincial poverty rates, %
2009 2003 Linear (2009) Linear (2003)
Assessing the distributive impact of policies:
Exemple #8Are fiscal transfers reducing spatial inequalities?
2030 Sudan GDP per capita
(Annual average growth rate 2015-2030) +$218(+0.7)
Gender Parity
+ $14 (+0.05)
+ $66(+0.2)
High levels of Gender Discrimination
Simulation tools :
Example #9
What are the economic gains of greater gender parity in
social institutions?
Forecasting a country’s national income in 2030 if discriminatory social institutions
would be eradicated or at least reduced under different scenarios is a powerful
advocacy tool.