Essay on Measuring Economic Participation and Social Protection

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An increase in economic participation leads to a number of positive outcomes, including better standards of living, access to education and other social factors that increase the well-being of a population. Employment is a main measure of economic participation in an economy and the issue of inequality, in terms of income and gender, plays an important role in the social protection available in an economy. It is common to find that individuals in the lower quintile of the population are greatly affected by income inequality, not only because they receive a small amount of total income, but they don’t have the necessary resources to develop themselves, both academically and personally. In addition to the lower quintiles of the population …show more content…
The World Bank measures poverty rate in the economy using the poverty headcount ratio, which is the percentage of the population living below the poverty line. Different organizations have thresholds to be considered poor; in the case of the World Bank, this figure is U.S. $2 a day.
Using the World Bank’s measure of poor, in 2011, the poverty headcount ratio for Belize, El Salvador, Guatemala and Honduras are 43%, 40.6%, 53.7% and 61.9% respectively (World Bank, 2013). Honduras has the highest number of individuals living below the poverty line, followed by Guatemala, Belize and then El Salvador. Although Guatemala had the least unemployment rate, it, nevertheless, has high poverty rates relative to the three other countries. One can only infer that individuals are underpaid in Guatemala, or the cost of living is higher compared to their minimum wage. Belize, on the other hand, is the only economy that has unemployment rates in double digits, but it had the second lowest poverty rates, relative to the other three countries.
Income also plays an important role in economic participation and social protection, where countries with higher GDP per capita, tend to have increased standards of living, as compared to countries with lower GDP per capita. GDP per capita does not give us information regarding the distribution of income, since it is just an average of income received

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