SOCIAL PROTECTION AND SOCIAL INCLUSION IN ARMENIA , AZERBAIJAN AND GEORGIA SYNTHESIS REPORT European Commission Directorate-General for Employment, Social Affairs and Inclusion Manuscript completed in 2011 European Commission Neither the European Commission nor any person acting on behalf of the Commission may be held responsible for the use that may be made of the information contained in this publication. Gesellschaft für Versicherungswissenschaft und –gestaltung e.V. Hansaring 43, D -50670 Köln www.gvg.org Authors: Birgit Garbe-Emden Sabine Horstmann Yvette Shajanian Zarneh © European Union, 2011 Reproduction is authorised provided the source is acknowledged. 2 Table of Contents Introduction............................................................................................................................................ 5 1 Main factors influencing social protection and welfare ............................................................ 9 1.1 Economic trends...................................................................................................................... 9 Macroeconomic development.......................................................................................................... 9 Fiscal policies and state revenues ................................................................................................ 10 Inequalities and remittances.......................................................................................................... 10 Territorial disparities ...................................................................................................................... 11 1.2 Population and demographic trends...................................................................................... 12 Ethnic Minorities ............................................................................................................................ 12 Internally displaced persons (IDPs)............................................................................................... 13 1.3 Labour market trends ............................................................................................................ 14 Labour force participation and employment .................................................................................. 14 Unemployment............................................................................................................................... 17 Inactivity......................................................................................................................................... 19 Labour Market Policies .................................................................................................................. 19 1.4 Educational Systems ............................................................................................................. 20 Pre-school education..................................................................................................................... 21 Primary and secondary education................................................................................................. 21 Tertiary education.......................................................................................................................... 22 Vocational education ..................................................................................................................... 22 Access to education ...................................................................................................................... 23 1.5 Main challenges and Conclusions......................................................................................... 24 References ........................................................................................................................................ 26 2 Social Protection System ........................................................................................................... 35 2.1 Institutional legacies .............................................................................................................. 35 2.2 Overview on social protection expenditures.......................................................................... 36 2.3 Contributory benefits ............................................................................................................. 36 2.4 Non-contributory benefits ...................................................................................................... 37 2.5 Institutional changes and decentralisation ............................................................................ 38 2.6 Main challenges and conclusions.......................................................................................... 39 References ........................................................................................................................................ 40 3 Poverty and Social Exclusion .................................................................................................... 42 3.1 Historical Background............................................................................................................ 42 3.2 Profiles of Poverty and Social Exclusion ............................................................................... 43 Poverty and Social Exclusion in Armenia...................................................................................... 43 Poverty and Social Exclusion in Azerbaijan .................................................................................. 44 Poverty and Social Exclusion in Georgia ...................................................................................... 45 3.3 Determinants for Vulnerability ............................................................................................... 47 Household Composition ................................................................................................................ 47 Employment status ........................................................................................................................ 47 Educational level ........................................................................................................................... 48 Access to Health Services............................................................................................................. 49 Internally Displaced Persons......................................................................................................... 49 3.4 Main Challenges and Conclusions ........................................................................................ 50 References ........................................................................................................................................ 52 3 4 Pensions....................................................................................................................................... 57 4.1 Historical Background............................................................................................................ 57 4.2 Pension system developments since 1995 ........................................................................... 58 Pension system developments in Armenia ................................................................................... 58 Pension system developments in Azerbaijan................................................................................ 59 Pension system developments in Georgia .................................................................................... 59 Stakeholders and main drivers of reform ...................................................................................... 60 4.3 Main challenges and conclusions.......................................................................................... 61 Adequacy....................................................................................................................................... 61 Financial Sustainability.................................................................................................................. 62 Employment of the elderly, early retirement and increase of retirement....................................... 62 References ........................................................................................................................................ 64 5 Health............................................................................................................................................ 67 5.1 Historical Background............................................................................................................ 67 Overview on common Soviet legacies .......................................................................................... 67 5.2 Health system developments since 1995.............................................................................. 68 Health system developments in Armenia ...................................................................................... 68 Health system developments in Azerbaijan .................................................................................. 69 Health system developments in Georgia....................................................................................... 70 5.3 Health status in comparison .................................................................................................. 71 5.4 Financing ..............................................................................................................................