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

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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

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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

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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.

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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.

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Kinh andHoa

Ethnicminorities

Urban Rural I II III IV V

National Ethnicity Residence Quintile

%

Increased Stable Decreased

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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.

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Unsk

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Skille

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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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2002 2006 2009

Years of schooling

A. Children's aspirations by ethnicity

Ethnic minorities Kinh and Hoa

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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

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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.

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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.

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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?

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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.

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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.