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OECD Reviews of Labour Market and Social Policies: Chile 2009

image of OECD Reviews of Labour Market and Social Policies: Chile 2009
This report analyses in detail the implications of recent developments in Chile's labour market and social policy and considers the available policy options from the perspective of OECD countries’ experience.

The report finds that Chile has enjoyed rising living standards over two decades of strong economic growth. The incidence of poverty is now much lower and there is better access to adequate housing, education and healthcare. Nevertheless, Chile’s income distribution remains disturbingly unequal by OECD standards. This is partly due to Chile’s a relatively low employment rate, especially for women, but it also reflects a segmented labour market, where much of the recent job creation has occurred in relatively low-productive sectors. Moreover, despite the existence of an internationally renowned pension programme, Chile’s social protection system as a whole has still a relatively long way to go before reaching the standards of developed countries in terms of effective coverage and capacity to assist needy households.  Chilean policy makers have begun to develop and implement a series of ambitious reforms, intended to promote the twin goals of work and equity.

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Reducing Poverty in the Working-age Population

Strong growth in economic prosperity has led to increased demands for a more inclusive society, with a more equal distribution of income and opportunities. So far, Chilean social policies for the working-age population have focused on developing health, housing and education policies (pension policies are discussed elsewhere). Using a combination of home visits and questionnaires, Chilean policy has been able to identify many of those in need and target support to low-income households. However, gaps in coverage remain, especially in rural areas. Other challenges remain, not least extending the local capacity to deliver services. Concerns about the quality of services have also been raised. This chapter gives a summary of education, health and housing policies, and analyses social policies, in view of the public resources put into them, their redistributive power, and their ability to identify clients and successfully target policies at those who are most urgently in need of support. The chapter looks at how the “holistic” approach of social service delivery in the Chile Solidario package helps clients to achieve better outcomes. The chapter concludes by looking ahead and discussing future Chilean social policy development, in particular the emerging issue of how to design and introduce a system of financial transfers to working-age families without weakening financial incentives to work.

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