Social protection safeguards access to basic opportunities across the life cycle, particularly in times of need. When a household is protected through a social protection scheme, potential loss of income from unemployment, maternity, disability, sickness or old age does not have to upend their standard of living.
Households in the bottom 40 per cent of the wealth distribution across Asia and the Pacific have consistently lower access to basic opportunities. Wealth is way ahead of other circumstances such as sex, residence, age and level of education (Figure 1).
If families’ economic situation is this important, how could a potential social protection transfer such as a universal child benefit help safeguard access to opportunities? By providing a slight increase in income of 4 per cent of GDP per capita to all households with children below the age of 18, we can simulate how access to several opportunities would improve. Using nationally representative household surveys from Armenia, Cambodia, Kiribati, Mongolia and Türkiye, the positive impact of this social protection transfer is significant, particularly for households left furthest behind. For technical information on the simulation, see technical appendix to our recent publication.
In Armenia, a monthly child benefit of 4 per cent of GDP per capita would increase the furthest behind households’ access to clean fuels from 21 to 31 per cent and their satisfaction with health services from 43 to 51 per cent (Figure 2, Panel A). The transfer would, however, not improve their dwelling conditions, as the determining characteristic for this indicator is the education level of the household head. In Cambodia, the corresponding transfer would boost access to clean fuels for cooking from a meagre 9 to 35 per cent. Equally important is that the transfer would reduce a range of negative coping strategies that hamper prospects of households, particularly for children (Figure 2, Panel B).
In Kiribati, simulated child benefit, would improve access to clean fuels among furthest behind households from 65 to 81 per cent (Figure 3, Panel A). In this way, average access rate among furthest behind households would come much closer to the national average access rate of 87 per cent. For clean water, the furthest behind groups would see a relatively modest increase partly because location of residence matters more than income in access to clean water. Importantly, receiving the child benefit would also increase overall living conditions.
In Mongolia, the same scenario would almost double, from 8 to 15 per cent, the share of furthest behind households with a savings account (Figure 3, Panel B). The impact would be smaller, but positive, in terms of accessing Internet at home, which would increase from 10 to 13 per cent among the furthest behind groups. No improvement is expected in access to clean fuels because access to this opportunity is driven by being in the rural area, which does not change by a small increase in income.
For Türkiye, the child benefit would have a significant impact on access to clean fuels, doubling from 20 to 39 per cent for furthest behind households, while having a warm home, a precondition for comfort, safety, and productivity, would go up from 49 to 67 per cent. Making ends meet would also increase significantly for the furthest behind from one third to half of these households.
In early September, we launched the Social Outlook for Asia and the Pacific: The Workforce We Need. The report calls for universal social protection and integration of contributory and non-contributory schemes to provide all people with individual entitlements along the life cycle in line with the Action Plan to Strengthen Regional Cooperation on Social Protection in Asia and the Pacific. It also shows that universal social protection is affordable. A universal and adequate social protection package would slash poverty in our region by half and cost between 2.5 and 7.6 per cent of GDP according to ESCAP’s Social Protection Simulator. The Action Plan can guide action towards broadening social protection coverage in Asia and the Pacific.