Social protection systems and programmes are crucial for both social and economic reasons. They safeguard individuals from falling into poverty due to social risks that prevent them from working and earning, such as old age, disability, loss of a breadwinner, illness, work injury, or unemployment. These programmes also help reduce poverty and income inequality. Additionally, they play a key role in stabilising the economy and preventing severe economic downturns during periods of crisis.

Although the situation varies across countries, a common pattern can be observed in the development of social protection in our region. Contributory (social insurance) policies, based on formal employment and providing more comprehensive social protection, cover a relatively small proportion of individuals and households. Non-contributory (social assistance) policies often offer limited coverage and benefit levels to poor individuals and households, and informal workers. Some of those who are neither poor nor formal are not covered by any of the systems (the so-called ‘missing middle’).

These ‘dual’ social protection systems are often based on different institutions and poorly coordinated. Their combined impact on poverty and inequality reduction is limited. Frequently, expensive pension regimes are regressive, contributing to increased income inequality. Children, women, and indigenous, afro-descendant and rural populations have lower levels of social protection coverage and are more affected by social risks and poverty. As a rule, these dual social protection systems reflect the entrenched inequalities of LAC countries.

Furthermore, our social protection systems face considerable challenges ahead. Many of our countries will undergo a rapid demographic transition: LAC is projected to double the proportion of their elderly population within just 28 years, half the time it took European countries to experience a similar demographic shift. In the coming decades, our countries will face increasing climate-related disasters, rising sea levels, and a decrease in agricultural productivity – all consequences of climate change – which will require more flexible and adaptive social protection policies. Finally, the Fourth Industrial Revolution will reshape the world of work and the way social protection is financed and delivered.

As UNDP, we need to support governments in the region to improve the coherence and efficiency of our social protection systems, moving them towards universality and making them more progressive and protective of those historically left behind. Their services and benefits must be designed to avoid gender biases that reduce women’s labour market participation and reinforce traditional gender roles. We need to strengthen their components that promote sustainable human development and make them more flexible and responsive to new kinds of shocks. 
In recent years, UNDP has significantly contributed to a better understanding of how social protection systems are structured in Latin America and the Caribbean, and to the improvement of social protection policies and programmes in our countries.

UNDP, alongside other partner UN agencies, evaluated the social protection systems in Guatemala and Barbados using the Core Diagnostic Instrument (CODI) methodology. We have also produced tailored studies to evaluate specific social protection programmes, such as the Bolsa Familia conditional cash transfer programme in Brazil, simulated the impact that introducing a social pension could have on old-age poverty in Honduras, and assessed labour market indicators in Guatemala, presenting a set of proposals to enhance the impact of active labour market programmes on labour productivity and the reduction of gender, ethnic, and rural/urban disparities.

Additionally, we are supporting the development and improvement of social registries in several countries (Brazil, Ecuador, Guatemala, Peru, and Trinidad and Tobago) and contributed to transforming SIUBEN, the Dominican Republic’s social registry, into an essential tool for Disaster Risk Reduction. Making our social protection systems more adaptive and responsive to climate-related shocks is at the top of our agendas.

Above all, we need to understand how governments and societies work, feel their political will, strive to build consensus around this agenda, and take advantage of gradual reforms (which are far more common than structural reforms) to advance in the direction of more equitable and comprehensive social protection systems.