taiwan's social protection: shift to asset accumulation welfare provision
TRANSCRIPT
By Mark Raygan E. Garcia, MPPG Student, The Education University of Hong Kong
Taiwan’s Social Protection ProfileA Shift to Asset Accumulation Welfare Provision: TFDA Case Study
Summary
Historical Footnotes
Approach to Policy Innovation
Compelling Landscape
The Family Development Accounts (TFDA)
TFDA Features
TFDA Rollout
Results
Analysis Against Aging Population
Social Protection Debate
Historical Footnotes
Nationalist government lifted martial law in 1988; end of authoritarian regime; spurred wider participation among LGUs and civil groups
1991 - Taiwan’s economic slump; income inequality worsened (4.2% in 1980 - 6.39% in 2001); asset value of rich16.8 times higher than poor (doubled by 2001)
1994 - first election in Taipei City; Chen Hsiu-Bien won as mayor; ushered in many economic and social policy-oriented reforms; responded to need for more social contracts
Pre-2000: reliant on private/familial transfers; income-based welfare provision 2000: Launch of first poverty anti-poverty campaign (and first PP partnership: Taipei Family Development Accounts (TFDA); 3-year experimental program
Approach to Policy Innovation
Problem Identificati
on
Networking/
Advocating in Policy
Areas
Shaping Policy
Debates
Building Support
Coalitions
Compelling Landscape
Targets asset accumulation for future economic sufficiency
Changing family composition (extended to nuclear)
Encouraged savings and employment; decrease welfare
Efficient government transfers amidst low private transfers
From remedial/curative to preventive/proactive
Integrate low-income earners into economic mainstream
TFDA Features
“Family” (from “Individual” - in keeping with filial relations)
Capitalized on Chinese values highlighting importance of savings and assets
Savings matching at 1:1 (progressive: from NT$2,000 to NT$4,000/month)
Program implementation; 3 years (July 2000 - June 2003)
Requirements: (a) current welfare recipient, (b) employed for at least pas 3 months; (c) per capita income below 60% mean-consumption expenditure
3 goals: (a) higher education, (b) micro-enterprise, (b) home purchase
TFDA Rollout
Polaris Securities Group (Pai Chen-Hsi Foundation) volunteered to raise funds to finance TFDA - NT$14,4000 (for 100 accounts)
July 2000 - 184 applicants; 100 selected
Recipients: majority female, 41-50 years old; single mothers and high school graduates
Of the 100 selected 68 dropped out by end of 2000
Including replacements
75 made regular deposits for 12 mos
72 continued for another year
3 left due to family emergency
By 2003 69 completed 3-year savings period
Note: Monthly deposit levels changed over the years, indicating increased interest in savings.
Results
Note: Significant drop in goal # 3 - Home purchase.
Results
But let us view Taiwan in the context of its aging population.
Analysis Against Aging Population
Birth Rate 8.5 Global Rank: 232
Fertility Rate 1.10 Global Rank: 220
Projected Years of Aging (65+) 14% (2017), 20% (2025), 30% (2040)
Age Dependency Ration
12.7 (7.8 working people support 1
elderly)Global Rank: 58
Social Protection Debate
Dependency Discourages savings
Sustainability Overburdens government; resource displacement
Utilization Prone to abuse; leakages
Equality / Equitability Disincentive; taxation strains
Political Considerations Costly; divisive; fluctuating
By Mark Raygan E. Garcia, MPPG Student, The Education University of Hong Kong
Taiwan’s Social Protection ProfileA Shift to Asset Accumulation Welfare Provision