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Social Protection before and during the Pandemic Era: Old and New Challenges
 
PIIS207987840015613-3-1
DOI10.18254/S207987840015613-3
Publication type Article
Status Published
Authors
Elena Shestakova 
Affiliation: Institute of Economics RAS
Address: Russian Federation, Moscow
Journal nameISTORIYA
Edition
Abstract

The article discusses the state and main trends in the transformation of the social protection sector in economically developed countries, primarily in Europe, after the economic crisis of 2008/2009, associated with state savings on social spending, changes in the labour market, and the exemption of employers from the fulfilment of certain obligations regarding employees' working conditions and insurance. The most attention is paid to the traditional social support tools and their changes during the new crisis caused by the pandemic: payment of sickness and unemployment benefits, part-time employment support schemes and guaranteed minimum income, and issues of financial accessibility of health care services.

Abstract (other)В статье рассматриваются состояние и основные тенденции трансформации сектора социальной защиты в экономически развитых странах, прежде всего европейских, в период после экономического кризиса 2008/2009 гг., связанные с экономией государства на социальных расходах, изменениями на рынке труда, освобождением работодателей от выполнения некоторых требований в отношении условий труда и страхования работников. Наибольшее внимание уделяется традиционным инструментам социальной поддержки и их изменениям в ходе нового кризиса, вызванного пандемией: выплате пособий по болезни, безработице, схемам поддержки неполной занятости и обеспечения гарантированного минимального дохода, вопросам финансовой доступности услуг системы здравоохранения.
Keywordssocial protection, labour market, social insurance, budget financing, social benefit, guaranteed minimum income
Keywords list (other)социальная защита, рынок труда, социальное страхование, бюджетное финансирование, социальные пособия, гарантированный минимальный доход
AcknowledgmentThis article is a translation of: Шестакова Е. Социальная защита до и в эпоху пандемии: проблемы старые и новые // Общество и экономика. 2021. Вып. 1. C. 81—99. DOI: 10.31857/S020736760013403-2
Received22.03.2021
Publication date25.06.2021
Number of characters47011
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Table of contents

General trends and structure of the social protection system
Availability of medical care
Social support networks and guaranteed minimum income
Special problems: social support for precarious and temporarily unemployed workers
Employment support programmes
1

General trends and structure of the social protection system

 

On average, public spending on social protection in the EU before the start of the pandemic was 28 % of GDP, ranging from 34 % of GDP in France to 15 % in Romania and the Baltic States [16, p. 11]. According to the medium variant, the main source of funds was the insurance premiums of social partners (55 % of the total expenditures), followed by budgetary funds (40 % of expenditures), and 5 % were other sources, including investment income from the surplus placement. However, regarding the countries, this ratio varied significantly depending on the used insurance or budgetary model of social protection and different financial rules for each component of the system (retirement benefits, long-term care, sickness and unemployment benefits, and especially health care). So, for example, for Denmark, Sweden, and Great Britain, mainly budgetary financing of medical services is characteristic (over 80 % of health care costs), but for Germany, France, and the Czech Republic, insurance is significant (more than 75 % of costs in this area) [1, p. 12].
2 In Germany, the founder of the insurance system of social assistance, the share of insurance premiums is 64.8 %, and financing from tax revenues is 33.5 % of the total expenditures for these purposes [7, p. 5]. The level of insurance payments is even higher in the financing of social benefits and services in the Baltic States and Eastern Europe. Great Britain, Ireland, Sweden, and especially Denmark are among the few countries where the share of tax funds in social spending exceeds 45 %.
3 In insurance-type systems, benefits are linked to employment, and a large share of social benefits goes to households with relatively higher incomes. In Italy, transfers received by people of working age who are in the bottom 20 % of the population in terms of income account for about 40 % of the average level of social transfers in the country, and recipients who make up the wealthiest quintile of the population receive 200 % of the average level. In Spain, this ratio is 60 % and 150 % of the average level of social transfers in the country. Conversely, relatively higher social benefits are received by the low-income part of the population in Australia, the Netherlands, and the UK. In Great Britain, the ratio of social transfers paid for the bottom and top quintiles of the population by income is between 155 % and 25 % of the average level of social transfers [17, p. 8].
4 Over the past decade, in the field of financing social protection, there has been a trend towards a slight decrease in the share of insurance contributions of social partners (from 59 % in 2005 to 55 %), whereas an increase in the share of taxes, as a rule, general taxes (from 37.5 % to 40 %). At the same time, the share of employers, in general, with rare exceptions, declined more rapidly than that of workers. The question of the ratio of general and special taxes in the process of social financing was decided in favour of the former. Special taxes play a more or less significant role in social financing only in France (24 % of total funding) and Belgium (10 %).
5

The change in the ratio of insurance payments and budgetary social expenditures was the result not only of reforms in pension provision and medical care carried out in many countries but also in many cases of structural transformations, including changes in the labour market and an increase in the number of employees who are paid reduced contributions or not paid at all. For example, in Italy, in order to reduce labour costs and keep the level of employment of certain groups of workers on the move, employers used a partial or temporary (up to 3 years) cessation of payment of insurance premiums hiring workers on flexible contracts, while contributions for workers were carried out by the state. Other important factors were the growth in the number of contracts with reduced insurance premiums (for self-employed, freelancers, platform workers), and the expansion of the use of programmes of minimum benefits and pensions [11, p. 14]. Nevertheless, as things stand, the contributions of employers, on average, finance 35 % of total expenditures on social protection, 15 % of total expenditures on employees, and self-employed and recipients of benefits receive 2 % each.
6
  2005 2016
old age pensions 38.6 40.1
medical benefits 28.7 29.5
pensions and disability benefits 8.0 7.4
survivor benefits 6.7 5.5
family benefits 8.4 8.7
unemployment benefits 5.8 4.6
housing allowances 2.0 2.0
poverty benefits 1.8

2.2

Table 1. Sh Sections are of total spending on social protection ( %, EU-28 average). Source: Jessoula M., Pavalini E., Raitano M., Naliti M. Financing social protection // Italy. Brussels: European Commission. 2019. P. 10.
7

In most countries, pension payments form the most significant and constantly growing sector of social spending despite the long-term reforms to raise the retirement age, restrictions on early retirement, and freeze or limit for the indexation of pensions.

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