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Armenia: Social Protection and Social Inclusion

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Armenia: Social Protection and Social Inclusion CAUCSUS RESEARCH RECOURCE CENTERS–ARMENIA EURASIA PARTNERSHIP FOUNDATION Armenia: Social Protection and Social Inclusion Country report Authors: Karapetyan Susanna (research team leader);Manasyan Heghine (project coordinator);Harutyunyan Nune;Mirzakhanyan Astghik;Norekian Misak Disclaimer: The sole responsibility for the content of this report lies with the authors. The European Commission is not responsible for any use that may be made of the information contained therein. The report will be available at the website of the Directorate Social protection and Integration (http://ec.europa.eu/employment_social/social_inclusion/index_en.htm) Abstract: The report “Social Protection and Social Inclusion in Armenia” is prepared within the “Social Protection and Social Inclusion in Southern Caucasus” project initiated by the European Commission, DG Employment, Social Affairs and Equal opportunities, Directorate Social protection and Integration. The report is developed taking into consideration the objectives proposed by the EU under the Open Method of Cooperation. The report attempts to: (i) provide an up-to-date and relevant information and comprehensive analysis on current social protection and healthcare systems; (ii) highlight the key challenges, sources of risks and policy issues; (iii) outline country specific problems; and (iv) link the strategies of sustainable economic growth to social cohesion, equity and equal opportunities for all members of society by assuring adequate, accessible, financially sustainable and efficient social protection system and social inclusion policies. Social Protection and Social Inclusion in Armenia Caucasus Research Resource Centers – ARMENIA A Program of Eurasia Partnership Foundation Armenia: Social Protection and Social Inclusion COUNTRY REPORT Team of authors: Karapetyan Susanna Manasyan Heghine Mirzakhanyan Astghik Norekian Misak Harutyunyan Nune 2011 Yerevan, Armenia 2 Social Protection and Social Inclusion in Armenia Table of Contents Executive Summary ......................................................................................................7 Introduction ............................................................................................................................. 7 Macroeconomic Overview...................................................................................................... 8 Labor Market............................................................................................................................ 9 Education System ................................................................................................................. 10 Migration and Remittances .................................................................................................. 10 Demographic Trends ............................................................................................................ 11 Territorial Disparities ............................................................................................................ 11 Social Protection System ..................................................................................................... 12 Poverty and Social Inclusion ............................................................................................... 13 Pension System .................................................................................................................... 14 Health and Long-Term Care ................................................................................................. 15 Chapter 1. Country Economic, Demographic and labor Market Overview.............17 1.1 Introduction ..................................................................................................................... 17 1.2 Macroeconomic Overview.............................................................................................. 19 Governance and Fiscal Policy..............................................................................................................23 1.3 Labor Market.................................................................................................................... 24 Labor Market: Evolution and Structure ..............................................................................................24 Employment Structure ...........................................................................................................................27 Educational Level and Labor Market Outcomes................................................................................30 Informality ................................................................................................................................................31 Unemployment........................................................................................................................................31 Wage Policy and Wage Dynamics.......................................................................................................34 Labor Market Policies ............................................................................................................................36 1.4 Education System ...........................................................................................................39 Reforming the Education System and Policy Issues ........................................................................39 Expenditures on Education...................................................................................................................40 Educational Attainment..........................................................................................................................41 1.5 Migration and Remittances ............................................................................................ 44 Migratory Processes ..............................................................................................................................44 Remittances ............................................................................................................................................46 1.6 Demographic Trends ...................................................................................................... 47 1.7 Territorial (Regional) Disparities ................................................................................... 51 3 Social Protection and Social Inclusion in Armenia 1.8 Key challenges ................................................................................................................ 52 1.9 References, Annexes and Tables .................................................................................. 54 References ..............................................................................................................................................54 Annexes ...................................................................................................................................................55 Tables.......................................................................................................................................................56 Chapter 2. Social Protection System.......................................................................61 2.1 Overview of Social Protection System.......................................................................... 61 2.2 Current Social Protection System ................................................................................. 63 Social Insurance .....................................................................................................................................63 Social Assistance System.....................................................................................................................68 Social Services Provision......................................................................................................................73 2.3 Financing of Social Protection ...................................................................................... 74 Source and Structure of Financing ......................................................................................................74 Fiscal Administration and Decentralization ........................................................................................76 Assistance of International Donors......................................................................................................78 2.4 Key challenges ................................................................................................................ 81 2.5 References, Annexes, Tables ........................................................................................ 83 References ..............................................................................................................................................83 Annexes ...................................................................................................................................................83 Chapter 3. Poverty and Social Inclusion in Armenia................................................87 3.1 General Overview............................................................................................................87 3.2 Poverty Profile: Recent Trends...................................................................................... 88 Measures of Poverty ..............................................................................................................................88
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