Employment and social protection are two critical avenues towards achieving pro-poor growth and the Millennium Development Goals. In developing countries the majority of poor people work, but employment conditions are poor, productivity is low and incomes inadequate. Policies that improve conditions in the informal economy, increase the productivity and employability of poor people and improve the enabling environment for local entrepreneurship will lead to better employment outcomes. Social protection enables households to invest in productive activities and human capital, which raises their productivity and incomes. Social protection can be affordable, including for low-income countries, and efficiently tackles poverty through improved health, increased school attendance and less hunger and malnutrition.

There is growing demand in developing countries for more public action on social protection and employment. To help donors respond, at its High Level Meeting on 27-28 May 2009 the DAC endorsed the following policy statement which encourages donors to provide adequate, long-term and predictable financial assistance to underpin developing countries’ efforts to build social protection systems and to make employment and decent work a key objective of development co-operation. In addition, through its Network on Poverty Reduction (POVNET), the DAC has developed policy guidance notes for donors on employment and social protection.