Public Employment Programmes: Framing the Context HSRC EPD SEMINAR - PowerPoint PPT Presentation

Assessing the Livelihood Impacts of Public Employment Programmes: Framing the Context HSRC – EPD SEMINAR SHIRIN MOTALA; SENIOR RESEARCH MANAGER, ECONOMIC PERFORMANCE AND DEVELOPMENT

POLICY RESPONSES TO POVERTY AND UNEMPLOYMENT Traditional responses to poverty and unemployment are to introduce social protection and active labour market policies.  Active Labour Market Policies • Employment Guarantee Schemes • Training Lay off Schemes • Skills Programmes (Learnerships etc.) • SMME development  Social Protection Policies • Cash Transfers (grants) • Social insurance (UIF etc.) • Public Employment Programmes • Nutrition and Feeding Schemes

Public Employment Programmes (PEPs) • Globally many governments have implemented public employment programmes (PEPs) as an important policy instrument for mitigating poverty and unemployment – short term response; • Historically since 1920’s in USA, Australia, SSA, Latin America and Asia; • PEPs provide work opportunities for those willing to work but unable to secure work – government becomes an employer of last resort (ELR); • Prioritization of PEP’s based on assumption that it has + effect on poverty and unemployment.

THEORY OF CHANGE: • Public employment programmes transfer impacts in three ways-: o Serves a Social Protection Function: Transfer of wages (income) – below market level – self targeting; o Address Service delivery and infrastructure deficits: Assets and services delivered to individual, households and communities; enhance access to social infrastructure – Useful Work o Enhance Labour Market Access : Skills development, first work experience, employment

International Types of PEPs Typology of Public Employment Programmes – based on study of 167 projects globally • Type A: Primary objective is the provision of safety nets or social protection at a household level and are for a single or short-term period. This was the predominant type. Response to emergency. • Type B: Programmes which offer repeated or on-going employment opportunities as a form of income insurance. The study found only 6 such programmes representing 4%. Examples MNREGA, CWP & Zibambele. • Type C: Programmes promoting aggregate employment by creating infrastructure using labour intensive techniques. Only six programmes (4%) were found. EPWP Phase 2; Gundu Lasho • Type D: This related to programme that enhance employability by improving the quality of labour. Based on assumption of “graduation” - example EPWP

Different Purposes for PEP’s Two distinct policy objectives alleviate unemployment and poverty. • In developed economies main purpose is to give people unemployed for long period exposure to labour market – substitute unemployment benefits with wages; • In developing economies the purpose is to absorb labour during temporary crises or to address structural mismatch: • where jobs exist but people don’t have appropriate skills; • too many work seekers; • Deficient demand – capital absorbing economy.

PEP Historical Experience in SA 1920’s 1990’s 2004 • Poor white • CBPW • EPWP problem

EPWP Origins • The Expanded Public Works Programme (EPWP) has its origins in Growth and Development Summit (GDS) of 2003. At the Summit, four themes were adopted, one of which was ‘ More jobs, better jobs, decent work for all’ . The GDS agreed that public works programmes ‘ can provide poverty and income relief through temporary work for the unemployed to carry out socially useful activities’ . • The Programme is a key government initiative, which contributes to Governments Policy Priorities in terms of decent work & sustainable livelihoods, education, health; rural development; food security & land reform and the fight against crime & corruption. EPWP subscribes to outcome 4 which states “ Decent employment through inclusive economic growth. ”

HSRC Engagement with PEP’s  Employment Scenarios 2004  Scaling up ECD in EPWP 2008  Labour Market Programmes  EPWP Impact Assessment Study, KZN (2013-2015)

HSRC Employment Scenarios: implications for EPWP • HSRC employment scenarios looked at potential employment creation to 2014 • A critical question was how different industrial trajectories might lead to different GDP growth rates, namely 3%, 4.5% and 6%. • Given the economic downturn, it is possible that SA’s average GDP growth between 2004 and 2014 might be between 3% and 4%.

EPWP jobs needed in 3 scenarios 2014 Worst Middle Best scenario scenario scenario 2004 GDP growth rate pa 3.0% 4.5% 6.0% Market-based jobs 9,788,000 11,899,441 13,121,354 13,805,444 Public service 1,500,000 1,828,492 1,996,388 2,199,109 EPWP-type (residual) 172,000 2,857,115 1,468,485 579,503 Infrastructure + Environment 170,000 370,000 370,000 220,000 Social sector 2,000 2,487,115 1,098,485 359,503 Total 11,628,000 16,588,152

Employment scenarios (2) • The scenarios assumed government wanted to halve unemployment and poverty between 2004 – 2014. • Much easier to do if growing at 6%, but ANC has recommitted to this target even in the context of a slowdown. • What if EPWP is the only strategy to make up for the shortfall in employment creation (after market based, informal sector and public sector employment accounted for). • Then will need to generate 1.5 m to 2.8 m work opportunities in any one year • Substantially larger than current programme, very costly in period of declining govt revenue, and question about capacity will require creative thinking about how to do this (not if?)

Cost of slow market reforms & EPWP as fall-back – scale of programme vs other priorities 2006/7 2003/4 - 2013/4 GDP growth rate pa 3.0% 4.5% 6.0% Non-interest spending (R bn) R 473.8 R 613.1 R 695.0 R 786.1 Personnel expend (Rbn) R 172.3 R 222.9 R 252.7 R 285.9 Non-personnel expenditure (R bn) R 301.5 R 390.1 R 442.2 R 500.2 EPWP (Rbn) - est R 50 pp pd x R 58.0 R 26.6 R 10.2 230 days Remainder available for other new R 301.5 R 332.1 R 415.6 R 490.0 priorities(Rbn) Budget trade-offs: • social grants • social services – health, education, social insurance • improved conditions of service for public servants • economic infrastructure to support expansion of ‘decent work’ • investment in agriculture and food production

Focus of this Roundtable • Understand the contribution of assets and services delivered through PEP’s from a global and local perspective; • Explore the challenges of assessing the contribution of assets and services to livelihoods; • Present evidence of the impact of food as a wage transfer model in EPWP.

Focus on Assessment of Value of Assets & Services • Economic benefit of asset created or service delivered is assumed rather then empirically assessed • Not always readily apparent what the value is. • Important to assess the impact of the assets and services consumed by the poor, rather than non poor • Cannot assume that all assets and services benefit the poor or are of acceptable quality. E.g. Road built may benefit farmers to get products to market or help children access schools easily. However a dam may not assist poor if piped water is not made available to households.

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