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Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating 1
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Page 1: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentación

Social Policy and Job Creation in Mexico

Gustavo Merino

Deputy Minister of Social and Human Development

MEXICO

Policy Forum: Creating More and Better Jobs

OCDE-World Bank

Rabat, Morocco. May 7, 2008

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Page 2: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentaciónMexico finds itself in a demographic transition that demands continuous and abundant job creation

• The Economically Active Population will reach 50 million people this year, and will continue to rise over the coming decades.

• The country needs to generate approximately 1 million jobs annually.

• However, in the last few years, the creation of jobs in the formal sector (with job-linked social security) has fallen short of the 1 million benchmark.

Percentage of the Population (by age)

‘01 ‘02 ‘04‘03 ‘05 ‘07‘06

Source: Ministry of Finance and Public Credit

Source: CONAPO (National Population Council)

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Page 3: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentaciónMore new jobs are created in the informal sector

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Source: CONEVAL estimates, based on the Mexican Family Life Survey 1992-2006

• Recent evidence suggests that the labor market is not fully segmented and that costs associated with formality (taxes and fees) plus the availability of alternative social protection programs may create incentives for informality and mobility within sectors (Levy, 2006)

• However, this does not rule out that many workers, especially those with low skills and education may have few options for formal employment

Page 4: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentaciónInsufficient job creation in the formal labor market has grave implications

• 58% of the population lacks coverage through the social security institutions

– Social security benefits are linked to formal employment

• Among the self-employed and agricultural workers, over 90% have no social security and 93% of heads of household in the first income quintile lack social security.

• Being outside the framework of social security and benefits has negative consequences such as out of pocket health expenditures and lack of pensions, that can entrench or exacerbate poverty conditions

• Expansion and creation of new social programs provides protection to those without social insurance, such as health insurance, child care options, housing and non contributory pensions for the rural elderly, but may perpetuate labor market distortions.

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Page 5: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentaciónCreating more and better paid jobs is imperative for poverty alleviation

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• Spreading the benefits of growth requires an approach that simultaneously Uses targeted social assistance programs to alleviate poverty and increase productivity while facilitating access to the labor market and economic opportunities

Source: CONEVAL

Page 6: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentaciónMexico´s New Social Policy Strategy places considerable attention on employment opportunities

Social Safety Net

Development of Basic Capacities

Bridges

Economic Development

and Well-Being

Access to Basic Social

Rights

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Mexico just launched a social policy strategy that joins specific social and economic policies to increase incomes for the poor and promote job

creation and employment

Page 7: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentaciónDevelopment of Basic CapacitiesDevelopment of Basic Capacities

• Tools that raise individuals’ and families’ productivity and promote their free and full participation in society. – Nutrition: Increase access to food, as well as conditions

that improve nutrition, specifically amongst children and women of child-bearing age.

– Education: Implement reforms to guarantee universal access to quality basic education.

– Health: Provide universal access to healthcare.

– Housing and Basic Social Infrastructure: Broaden reach of existing programs, guaranteeing services for the least advantaged families.

Examples:

- Oportunidades, Food support programs (Programa Alimentario, Leche, Diconsa)

- Housing programs for the poor (Fonhapo, Conavi)7

Page 8: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentaciónSocial Safety NetSocial Safety Net

• Tools that help individuals throughout the life cycle to overcome contingencies and situations of vulnerability.

– Health insurance program “Seguro Popular” to the uninsured population

– Aid to families and localities affected by natural disasters.

– Social and financial assistance to persons in situations of vulnerability, such as:

• the temporarily unemployed (Temporary Employment Program)

• migrant agricultural workers (Programa Jornaleros Agrícolas)

• senior citizens (Programa 70 y +)

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Page 9: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentaciónBridgesBridges

• Bridges are necessary to ensure that social development translates into larger incomes and better well-being of the population

• It requires coordination and actions from both social and economic policies.

– From Social Policy, actions that strengthen capabilities, raise productivity and facilitate access to employment opportunities

– From Economic Policy, conditions conducive to economic and employment growth

Brides

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Page 10: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentación

101010

Social Policies to improve individual earningsSocial Policies to improve individual earnings

• Facilitate entry into the labor market– Access to childcare through the Childcare Center Program– Information to link job seekers and employers (ex. job banks)

• Build human capital- Job training- High school and university- Formal certifications for diverse job skills

• Support for productive projects and self-employment (training, micro-credit etc)

• Install adequate infrastructure for economic activity (e.g. roads wide enough for trucks, electricity adequate for powering tools and machinery, rural roads, telecommunications)

• Improve urban planning

Social PolicyImproved earnings

Page 11: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentación

111111

Economic Policies to improve individual earningsEconomic Policies to improve individual earnings

• Increase flexibility and mobility in labor market and reduce labor costs.

• Develop and strengthen savings mechanisms and ensure that poor families can access them.

• Stimulate competitiveness: - Administrative and sectoral deregulation - Effective anti-monopoly policies

• Create direct and indirect employment through large-scale infrastructure projects.

• Promote regional development: - Encourage companies to establish branches in excluded areas.- Take advantage of existing competitive advantages and develop new ones.

• Ensure rule of law and public safety.

Economic PolicyImproved earnings

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Page 12: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentación

Examples of Successful PoliciesExamples of Successful Policies

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• Child Care program: Estancias Infantiles

• Health Insurance: Seguro Popular

Page 13: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentaciónAffordable & Accessible ChildcareBridgeBridge

• Prior to 2007, childcare options were primarily (and insufficiently) offered through the social security institutions for affiliated persons or much less so, through other public institutions in addition to more expensive private services

• In Mexico, two thirds of women report not working for income (vs. 12% of men).

• Women workers tend to live in higher income households (although 25% are poor) because these are households with two earners.

• Childcare availability can increase women’s participation in the labor force, and consequently help to tackle poverty.

• The new Childcare Center Program (Programa Estancias Infantiles) helps establish privately run local daycare centers for the children of low-income working mothers:

• Subsidizes the creation of such centers by eligible individuals, provides training for the owner and her assistants and supervises the operation of the centers to ensure safety and quality care.

• Helps low income working or students mothers to pay for child care services with a voucher-like mechanisms that allows choice of day care center

• Generates opportunities for employment and self employment 13

Page 14: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentación

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In January 2007: Currently:

29 of 100 beneficiaries lacked employment

23 of these 29 now have employment

3 of 100 beneficiaries were studying2 of these 3 beneficiaries have

continued studying while 1 is working

68 of 100 beneficiaries were employed

Only 3 of these 68 have lost their jobs

Some results (since january 2007)

Children enrolled 152,272

Working mothers assisted 139,804

Operating child care centers 6,535

Jobs created directly 28,035

Affordable & Accessible ChildcareBridgeBridge

• 97% of beneficiaries are women

• 24% report working on their first job. 76% of them were not working

previously for lack of child-care options

Page 15: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentaciónHealth Insurance: Seguro PopularSocial Safety NetSocial Safety Net

• Seguro Popular is a public health insurance financed through general revenue, which is free and voluntary, and offers a specialized package of healthcare services.

• Seguro Popular covers the medical expenses of poor families that lack alternative sources of social security.

• Seguro Médico para una Nueva Generación, a component of Seguro Popular, provides health insurance for all children of uninsured families born after December 1st, 2006.

– Covers all medical procedures for the child, and

– Provides regular Seguro Popular coverage to the other family members.

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Page 16: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentaciónUniversal Health InsuranceSocial Safety NetSocial Safety Net

• The goal by 2010 is universal health coverage, through a combination of Seguro Popular and the Social Security Institutes. It is estimated that Seguro Popular will cover almost 50% of the population.

• Seguro Popular currently has over 7 million families registered as beneficiaries.

• Seguro Médico para una Nueva Generación has 1,000,000 children as beneficiaries.

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Page 17: Título presentación Social Policy and Job Creation in Mexico Gustavo Merino Deputy Minister of Social and Human Development MEXICO Policy Forum: Creating.

Título presentación

www.sedesol.gob.mxwww.sedesol.gob.mx

www.presidencia.gob.mx www.presidencia.gob.mx

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