What Are the Trends Shaping the Future of Social Protection?

With the growing risks of climate change and economic turmoil, life seems to present new challenges every day. In this case, social protection is central to helping people cope with crises, and the system must expand to accommodate more conditions. What are some trends that will shape the future of social protection?

Ageing Population

Social protection refers to the benefits for individuals given based on risks across their life cycle and for those suffering from poverty and inequality.

The OECD’s “Megatrends and the Future of Social Protection” report presents an overview of emerging key aspects that will shape the future of social protection in OECD countries. From the state of the global population to our net-zero efforts, all have implications for the current social protection system and what needs to be done to make it more inclusive and effective for all.

The global population has seen significant shifts over the years, as shown by the ageing population and declining birth rate. The report notes that the old-age to working-age ratio has increased from around 20:100 in the early 1990s to 31:100 in 2022. This ratio is expected to rise to 54 people over 65 per 100 working-age people in 2052.

While the ageing population signifies that people can now live longer, the rate at which this trend escalates will likely inflict a major challenge for social protection systems. The demand for pension benefits will be higher than the contributions from the working population due to the declining birth rate and labor shortage. This challenge occurs in the context that older people are among the age groups most vulnerable to poverty, with older women being more likely to be poor (17%) than men (11%).

Employment and Unemployment

The trends in self-employment are also worth considering for the future of social protection. Although the number of self-employed workers has generally declined across OECD countries, the report notes a slight rise in the number of freelancers or platform-based workers.

Unlike those in more formal jobs, these workers vary in their types and arrangements and are, therefore, harder to categorize in certain systems. Still, due to the nature of their jobs, these workers generally have limited access to social protection despite facing occupational risks. The arbitrary job classification makes it difficult to determine suitable social protection contributions and benefits for self-employed workers.

On the other hand, the report also estimates the possibility of the negative impacts of energy transition on employment. According to the report, most workers in high-emission industries are more likely to be older, male, live in rural areas, have low educational backgrounds, and are less likely to engage in lifelong learning. All of these factors create high risks of long-term unemployment once the transition begins, signifying the need for accessible and adequate unemployment insurance schemes and income support policies.

The Future of Social Protection

Beyond the aspects mentioned above, the report also explores other trends that can influence the future of social protection, such as social policy changes, technological development, and climate change mitigations. All of these emphasize the urgency to mobilize financial resources to accelerate the expansion of social protection coverage.
Read the full report here.

Kresentia Madina

Reporter at Green Network Asia | Website | + posts

Madina is the Assistant Manager of Stakeholder Engagement at Green Network Asia. She holds a bachelor’s degree in English Studies from Universitas Indonesia. As part of the GNA In-House Team, she supports the organization's multi-stakeholder engagement across international organizations, governments, businesses, civil society, and grassroots communities through digital publications, events, capacity building, and research.