Regulatory changes to work risk insurance in Colombia

Read the note here or here

Successful Fulfillment of the “Putting Citizen First” 2011 International Program by Service Canada College

Following last year agreement between the Inter-American Conference on Social Security (CISS) and Service Canada College, the “Putting Citizen First” 2011 International Program took place for the second time, with the main goal of transmitting to officers of CISS member institutions important concepts regarding Canada’s experience in citizen-centered services.

This course took place in Regina, Saskatchewan, Canada, and counted on the participation of five officers from the following CISS member institutions: the Agency of Health and Working Risks of the Dominican Republic; the National Insurance Services of Saint Vincent and the Grenadines; and Mexico’s Social Security Institute.

The participants of this course went back home very satisfied, full of new knowledge to share with their coworkers.

The CISS looks forward to continuing collaborating with Service Canada College with more courses for officers of member institutions.

ILO demands safer work

In a press release, ILO Director-General, Juan Somavia, celebrated the rescue operation to free the 33 miners trapped underground for more than two months in a mine in northern Chile. Determined the achievement as a lesson for all and the importance of improving working conditions in activities deemed dangerous. The Director concluded with a universal appeal to a greater awareness to increase safety at work.

Today is the World Day for Safety and Health at Work

At the CISS we are hosting the XI Inter American Congress on Work Risk Prevention. See the site of the conference here.

Central American free-trade and labor issues

The Central American Integration Bank, through the office of Pablo Rodas, organized a meeting on the impact of free trade in the region. One of the speakers was Virgilio Levaggi, of the ILO, who talked about the process of the White Book agreed among the countries to evaluate labor issues. Yolanda Mayora de Gavidia, the Secretary for Central American Economic Integration also gave a very interesting talk. As we see in the table, CA has diversified noticeably towards China and Asia in general, South America, the Caribbean and the Andean Region. Now, manufacturing is the main export, leaving behind bananas, coffee and sugar. Certainly, the effect on labor markets are being felt.

More on health and safety at work

Yesterday we talked about the overall message of the III Congress on Prevention of Work Risk in Latin America. These are some of the main messages:

- There should be a more exhaustive use of information technology. In particular they have proven to be very useful to establish an early warning system.

- It must adopt a multi-cause approach to understanding and improving the prevention of diseases and accidents at work.

- Attention should be paid to the “causes of causes”: it doesn´t serve a treatment that rehabilitates the workers, if these return to work under the same conditions that causes the disease or accident.

- The collection bases on bonus-malus can be very efficient to align the incentives.

- It should give greater emphasis to rehabilitation and reintegration into the labor market.

- In the extension of coverage to the informal sector in particular, is very useful to focus efforts on the most vulnerable groups.

On safety and health at work

This are the main messages of the Iberoamerican Congress on Prevention of Work Risk:

--Work accidents have diminished around the world, although many people still suffer from preventable work risk, especially young workers, and even children

--Work related diseases (muscular problems, depression, and stress for example) on the other hand are increasing

This new reality means that the landscape is more complex since the instruments proven to reduce work accidents have less room and new approaches needs to be found to deal with work related diseases

In a long term perspective, the challenge is to extend coverage, specially to small and medium size enterprises

One of the main challenges in the near future is the global crises, since in the attempt to reduce cost, firms may "spend" less in prevention. Prevention must be seen as "investment" and not as a "expenditure"

On Work Risk Insurance

The following graphs show how the accidents and/or deaths in the workplace have fallen in the last years. This is the result of higher human capital and better technologies, among other factors. The bad news is that it is expected that diseases associated to the job will increase in the future years. As a consequence it is important to review the coverage, the legislation and the procedures.

On the value of a statistical life

The analysis of health and safety regulations requires placing a monetary value in reductions in health risks, including risk of death. In developed countries the value of a statistical life (VSL) is a measure used to value reductions in risks of death. The VSL can be calculated using different approaches and statistical models. For United States and Canada there are several estimations of the VSL. Unfortunately there are no studies that calculate the VSL for most of developing countries of the Continent. This is an area that needs research and, surely it is very interesting for those students of the economics and actuarial sciences looking for a thesis topic.

Global crisis: potential permanent effects of the crisis

As we have mentioned in previous notes, the global crisis will have an important impact on employment and salaries. The effect on one or the other depends on the labor supply elasticity and rigidities of wages. Economist in LAC have tried to measure the labor supply elasticity in economies with an important informal market and have tried to assess the impact of some rules, minimum wage for example, on the rigidity of wages. There are other important questions regarding the impact of a crisis in the labor markets, for example, what happen to people after displacement?

In an article, Gabriel Martínez, CISS´s General Secretary, and other co-authors found that after the Mexican crisis of 1995: i) some people could find another formal job, in many cases at a lower wage; ii) more people could find a job in economically active regions, that in the case of Mexico in those years were the border region; and iii) some people who lost their formal job were unable to find a new one (formal). This last effect was particular important for persons over 40 years old at the moment of the crisis.

Although the current crisis is different from the Mexican crisis in 1995 -- today involves almost all countries, these findings can be used to design social protection policies to the most vulnerable groups in order to avoid a permanent effect of the crisis.

Well-being and Social Policy

Well-being and Social Policy is a new peer-reviewed academic publication that is jointly coordinated by the CISS/UNDP/UIA. It is widely distributed in the American Continent among policy decision-makers and researches, and is published in both, English and Spanish, listed in journal indexes. The journal is directed towards academics, students, and decision-makers of the public sector who are not necessarily specialists in the field. For more information on the journal and its content, click here.
Here are a summary of the works published in the journal’s latest issue.


Economic Polarization and Governability in Mexico.
Rodolfo de la Torre

In this work the author intends to appraise alternative hypothesis about the origins of recent social revolt in Mexico. He shows that it is not clear that a severe rise in poverty preceded the origins of violent conflict but social polarization. Therefore, government attempts to deactivate the economic factors that lead to social unrest did not necessarily upgrade poverty-reduction policies.

Is Age-Grade Distortion in Brazil’s Primary Public Education System More Closely Associated to School Infrastructure or to Family Characteristics?
Rosangela Maria Pontili and Ana Lúcia Kassouf

This paper suggests an assessment of the impact that school infrastructure and family characteristics have on age-grade distortions in primary education in Brazil. Interaction between family characteristics and school infrastructure variables were explored to determine the most effective ways to retain students and ensure student promotions. Simulations were also made to assess the impact of enhancing school quality versus improving the socioeconomic status of families on lagging students. Results showed that Sao Paulo students from families headed by less educated heads of households and/or low income families would benefit more from public policies oriented towards improving school infrastructure.


Scale Economies in the Pension Fund Managers Industry in Mexico: A Semi Parametric Approach.
Nelly Aguilera and César Velázquez

In this paper the authors argue that previous studies that have found economies of scale in the case of Mexico were based on cost curves that were empirically not well specified. Authors estimate a semi parametric cost curve which allows them to conclude that if there exists economies of scale, minimum efficient scales are low, being reached by almost all PFM.


Retirement Incentives: Pension Wealth, Accrual and Implicit Tax.
Bernardo Lanza Queiroz

In this work the author estimates social security financial incentives for early retirement using contemporary techniques developed in economics and compares these estimates to those estimated for developed countries. He finds that implicit tax on continued work increases with age and amounts to over one-third of an individual potential earnings at age sixty-five.

Inter-American Award for Research on Social Security 2008

Each year the CISS organizes the Inter-American Award for Research on Social Security in two categories: Undergraduate thesis and free research and Postgraduate thesis (master and doctoral level). This year the winner of the first place in the Postgraduate category was Antonio Carlos Estima, the second place was for Evania Maria Oliveira. The third place in the Postgraduate thesis category, as well as, the Graduate Thesis and free research category was declared deserted.

We invite students and researchers to submit their works (thesis and publishable papers). Detailed guidelines can be found at CISS’ webpage


Here is a summary of the works winners.

First place:

In his work “Performance Assessment of the Program of Disability Benefits of the National Institute of Social Security/INSS, Management Branch of Florianópolis, SC, 2000-2002” Antonio Carlos Estima notices that since the 80s social security systems have faced an increasing demand for disability benefits without a corresponding increase in the required resources to run the program. In this framework the author perform a study case of the INSS’ Program of Disability Benefits in Florianópolis, SC, Brazil aimed to assess its performance.
The program was defined as a set of practices adopted by the Brazilian social security system towards a social policy of just allocation of benefits in the country. Social justice and distributive arguments were considered the guiding principles of this policy. However, author´s hypothesis is that the allocation of resources does not always follow such principles. To test the local functioning of the program the author uses econometric models of inflow and outflows of benefits.
After performing his analysis, he finds that differences in the performance among the agencies are not only explained by morbidity characteristics of its beneficiary population. Local labor market characteristics, complexity of local morbidity profile, as well as the possibility of fraudulent benefit concessions make possible the identification of more restrictive Agencies and more indulgent Agencies regarding concession and maintenance of benefits. The study also allows identifying two opportunistic behaviors generated by the system: “adverse selection” and “moral-hazard”.

Second Place:

Evania Maria Oliveira in her work “Social Protection and Informal workers in Brazil” analyses Brazilian protection policy as an element of inclusion for informal workers. She focuses on peddlers in the city of Fortaleza in the state of Caerá, Brazil since this city is one of the two main touristic places in Caerá. Most of the peddlers are excluded from the possibility to participate in the formal labor market and relay in merchandise sale as a work alternative.
She finds that informal activity is used among peddlers in Fortaleza as the source of occupation and income and in most of the cases as a work alternative and surviving strategy. Although many peddlers desire to have social protection, they lack capacity to pay for this right as they face unstable and low income. The author points that given the phenomenon of social exclusion of thousands of Brazilians, the construction of a democratic and effective model of public services is required. Such model should be aimed to provide public services of quality. She also notices that it is needed to construct a new relationship between social protection and informal workers to define projects and government decisions with priority for these workers. The study shows that the country need to change the profile of economic growth to restrain the growth of the informal sector and to consolidate a democracy with social inclusion.

The Americas Social Security Report 2009

At the CISS we are convinced that some of the most important problems that beset national social security systems will be solved only after a proper focus is given to administrative and organizational issues. Moreover, we believe that in order to improve, any strategy or reform should be subject to evaluation. The Americas Social Security Report 2009 issued by the CISS and recently released in our Annual Assembly presents what we consider the most applicable approaches to the evaluation of social security programs. The key ideas --that are further developed in the Report for pensions, health, child and long term care-- are:

1. The evaluation should respond to the concerns of different perspectives including the economic, actuarial, administrative, fiscal and operation research.
2. The approach should be carefully designed, and all steps needed for the evaluation should be performed: from the identification of stakeholders to the definition of the strategy to disclose results.
3. Evaluation should be performed for systems, agencies and programs. We consider programs to be managed by agencies and systems to be the collection of agencies and programs. Moreover, we insist that it should be recognized that many processes are performed in an agency and that the system of evaluation should be developed accordingly. To read about administrative models of social insurance we invite you to access the The Americas Social Security Report 2008.
4. Evaluation should have as its object of analysis the citizen. Therefore, the use of micro-data should be the norm and all contacts of the individual with the agencies and programs should be recorded in an integrated way.

We invite those interested in this topic to read our annual Report available at www.ciss.org.mx and to attend our conference “Making Impact Evaluations of Social Program Work” to be held February 12 -13, 2009.