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Reducing Poverty in Chile: Cash Transfers and Better Jobs

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  • Nicola Brandt

    (OECD)

Abstract

Notwithstanding impressive progress, poverty and inequality remain high in Chile in OECD comparison, and the tax-benefit system does little to improve on this. The government plans to introduce a new cash transfer for the poor, the Ingreso Ético Familiar. This is a welcome initiative. However, the transfer will be modest by OECD standards, at least initially, and it will be quite narrowly targeted at families living in extreme poverty. Over time, the government should consider increasing the size of this transfer and opening it to a wider range of beneficiaries through gradual benefit withdrawal. Strong support for the poor to find jobs of decent quality will be key to help them overcome poverty in a sustainable way. Ingreso Ético Familiar will come with an employment programme for beneficiaries. This should build on the existing infrastructure of active labour market policies, which will need to improve at the same time. The government should strengthen the capacity of local labour offices and use the current evaluation of training programmes to retain only those of proven effectiveness, while focusing them more on low-skilled workers and the unemployed. Strengthening unemployment benefits, while limiting severance pay, would make employment protection more effective and do more to avoid labour market duality. This Working Paper relates to the 2012 OECD Economic Survey of Chile (www.oecd.org/eco/surveys/chile). Réduire la pauvreté au Chili grâce aux transferts monétaires et à de meilleures possibilités d'emploi En dépit des impressionnants progrès accomplis, la pauvreté et les inégalités demeurent fortes au Chili par comparaison avec les autres pays membres de l’OCDE, et le système de prélèvements et de transferts ne contribue guère à améliorer la situation. Les autorités envisagent d’introduire un nouveau transfert monétaire destiné aux pauvres : Ingreso Ético Familiar. C’est une initiative qui va dans le bon sens. Cependant, au moins au début, le transfert sera modeste par rapport aux critères de la zone OCDE, et il sera ciblé très étroitement sur les familles vivant dans l’extrême pauvreté. A terme, il faudrait prévoir d’augmenter son montant et d’élargir l’éventail de ses bénéficiaires en instaurant une progressivité dans la suppression de la prestation. Il sera essentiel d’apporter aux pauvres un solide appui dans la recherche d’un emploi décent afin de les aider à sortir durablement de la pauvreté. Ingreso Ético Familiar s’accompagnera d’un programme pour l’emploi à l’intention des bénéficiaires. Ce dispositif devrait s’appuyer sur l’infrastructure existante des politiques actives du marché du travail, qu’il faudra améliorer parallèlement. Les autorités devraient renforcer les capacités des agences locales pour l’emploi et se fonder sur l’évaluation existante des programmes de formation pour ne conserver que ceux dont l’efficacité est prouvée, tout en les axant davantage sur les travailleurs peu qualifiés et les chômeurs. L’amélioration de l’indemnisation du chômage, couplée à la limitation des indemnités de licenciement, accroîtrait l’efficacité de la protection de l’emploi et contribuerait mieux à éviter le dualisme du marché du travail Ce Document de travail se rapporte à l'Etude économique de l'OCDE du Chili 2012 (www.oecd.org/eco/etudes/chili).

Suggested Citation

  • Nicola Brandt, 2012. "Reducing Poverty in Chile: Cash Transfers and Better Jobs," OECD Economics Department Working Papers 951, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:951-en
    DOI: 10.1787/5k9bdt4pld6h-en
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    1. Bauchet, Jonathan & Undurraga, Eduardo A. & Reyes-García, Victoria & Behrman, Jere R. & Godoy, Ricardo A., 2018. "Conditional cash transfers for primary education: Which children are left out?," World Development, Elsevier, vol. 105(C), pages 1-12.

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    More about this item

    Keywords

    cash transfers; inequality; inégalité; labour market; marché du travail; pauvreté; poverty; transferts d’argent;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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