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Volume :26 Issue : 98 2000      Add To Cart                                                                    Download

MOVING WELFARE RECIPIENTS TO THE LABOR MARKETIN KUWAIT: BENEFIT AND COST EVALUATION

Auther : By: Dr. Abbas Al-Mejren

 

 

Kuwait has allocated a portion of its oil income to welfare programs that include aid to needy individuals and families. The oldest such program was established in 1995 and has been designed to provide financial support to the elderly and family members that are unable to work. During the oil boom of the 1970s, the number of social aid programs increased significantly to include families of prisoners, dismissed employees, students, widows, divorcees, unmarried women and orphans.

The eighties, however, brought with it lower oil prices, and thus lower oil revenues in both nominal and real terms. This and the rise of free market economies have led policy makers to reevaluate the net benefits obtained from various air programs. Additionally, during the nineties, with the continuous deficit experienced by the public budget in Kuwait, together with the rise of the social welfare reform debate around the world, the idea of moving welfare recipients to the labor market gained some ground in the country.

This study aims to evaluate the potential benefit and cost of ending welfare payments to individuals that are able to work. It also addresses the impact of moving these individuals to the labor market on their standard of living, social condition and other considerations.

Since the data collected by the Ministry of Social Affairs and Labor on beneficiaries of the welfare programs are highly confidential, it was extremely difficult to obtain sufficient information on the economic and demographic characteristics of welfare recipients. Due to such serious limitation of data, a field survey was carried out to collect direct data from beneficiaries. Four hundred and six (406) responses to the field study questionnaire were obtained (5.8% of the total selected group). The study counted on these responses in assessing the characteristics of the welfare recipients with regard to their age distribution, education, skills, previous experience, ability, additional sources of income, job preferences etc...

The survey suggests that a large number of welfare recipients are well educated and able to work. Two-third of the recipients in the selected sample showed interest in different types of jobs. Most of them have favored the clerical type of work, while most of the low-educated as well as older-aged segments have chosen manual type of work.

The study concluded that moving welfare recipients to the labor market would partially reduce the public budget deficit and ease the social tensions among beneficiaries. It additionally suggests that welfare recipients, due to possible rise in their levels of income resulted from paid jobs as compared to their welfare payments, will be better off as they become economically self sufficient.

Seventy two Percent (72%) of the society sample expressed their belief that the present welfare payments are not sufficient to meet their needs. This also suggests that there is an implicit approval of the idea of moving from the welfare list of the labor market. On the other hand, 67% of the sample showed preferences in six types of office jobs: storage area controller, clerk, telephone operator, child-attendant, receptionist and sewing machine operator. These jobs were selected from a list of 23 types of job that were presented by the survey or suggested by the interviewers.

However, some other possible elements that is neither reflected by the data nor by the survey results was also considered by the study. It also evaluated the effect of such policy on the safety net of the society, the availability of job opportunities in the public sector, and other social difficulties that may arise because of factors that are related to the low level of income in the concentration areas of welfare recipients.

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May 18, 2017

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