Social Protection and Social Inclusion in Ukraine European Commission Directorate-General for Employment, Social Affairs and Equal Opportunities Manuscript completed on December 2009 Social Protection and Social Inclusion in Ukraine This report was financed by and prepared for the use of the European Commission, Directorate-General for Employment, Social Affairs and Equal Opportunities. It does not necessarily represent the Commission's official position. http://ec.europa.eu/social/main.jsp?langId=en&catId=750 Contractor: Ukrainian Centre for Social Reforms Panas Myrnyi Street 26, Kyiv, 01011, Ukraine Tel./fax: +38 044 280 82 10 E-mail: [email protected] Web-site: http://www.ucsr.kiev.ua/ Authors: Ella Libanova Olena Makarova Liudmyla Cherenko Lidiia Tkachenko Olena Palii The authors are grateful for the contributions of country studies and information by Larysa Lisogor, Nataliia Ryngach, Oleksiy Pozniak, Oksana Khmelevskaja, Pavlo Shevchuk, Anna Gvelesiani, Svitlana Aksyonova, Svitlana Poniakina, Nataliia Vlasenko, Nadiia Grygorovych © European Communities, 2009 Reproduction is authorised provided the source is acknowledged. Social Protection and Social Inclusion in Ukraine 2 TABLE OF CONTENTS Acronyms cited in text...................................................................................................................................................5 Executive summary........................................................................................................................................................6 1. General overview .....................................................................................................................................12 1.1. Introduction and long-term objectives ..............................................................................................................12 1.2. Macroeconomic situation ...................................................................................................................................14 1.3. Governance and fiscal policy ............................................................................................................................16 1.4. Labour market situation......................................................................................................................................18 1.5. Undeclared Work.................................................................................................................................................24 1.6. Educational system.............................................................................................................................................25 1.7. Migration and remittances..................................................................................................................................28 1.8. Demographic trends ...........................................................................................................................................30 1.9. Territorial disparities ...........................................................................................................................................32 1.10. Conclusions and key challenges.................................................................................................................36 References and tables....................................................................................................................................................37 2. Social protection system .......................................................................................................................55 2.1. Overview of the social protection system ........................................................................................................55 2.2. Financing of social protection............................................................................................................................58 2.3. Types of benefits and services..........................................................................................................................61 2.4. Social protection of the most disadvantaged groups.....................................................................................65 2.5. Influence of international organizations/donors..............................................................................................66 2.6. Drivers of reforms and system sustainability ..................................................................................................71 2.7. Future trends........................................................................................................................................................72 2.8. Conclusions and key challenges ......................................................................................................................72 References and Tables ..................................................................................................................................................73 3. Poverty and social exclusion................................................................................................................79 3.1. Introduction and objectives................................................................................................................................79 3.2. Historical perspective .........................................................................................................................................81 3.3. Profiles of poverty and social exclusion...........................................................................................................83 3.4. Vulnerable groups...............................................................................................................................................85 3.5. Conclusions and key challenges ......................................................................................................................89 Social Protection and Social Inclusion in Ukraine 3 References and tables....................................................................................................................................................90 4. Pensions.......................................................................................................................................................103 4.1. Introduction and objectives..............................................................................................................................103 4.2. Historical perspective .......................................................................................................................................105 4.3. Existing pension systems.................................................................................................................................105 4.4. Main reforms and drivers of change...............................................................................................................109 4.5. Pensions, exclusion and vulnerable groups..................................................................................................110 4.6. Sustainability of pension systems...................................................................................................................111 4.7. Public awareness and acceptance.................................................................................................................112 4.8. Conclusions and key challenges ....................................................................................................................112 References and tables..................................................................................................................................................113 5. Health and long-term care ...................................................................................................................116 5.1. Introduction and objectives..............................................................................................................................116 5.2. Historical perspective .......................................................................................................................................116 5.3. Health outcomes ...............................................................................................................................................117 5.4. Governance and financing...............................................................................................................................119 5.5. Access and quality in health care ...................................................................................................................124 5.6. Long-term care ..................................................................................................................................................125 5.7. Issues of sustainability .....................................................................................................................................126 5.8. Main reformers and drivers of change ...........................................................................................................127 5.9. Conclusions and key challenges ....................................................................................................................127 References and tables..................................................................................................................................................129