Social protection, redistribution and economic growth

Social protection has conventionally been associated with redistribution and equity. This paper examines the effects of different types of social protection on economic growth. It looks at the possible effects on human capital formation, on physical investment and innovation, on the local economy and on the macroeconomy, discusses these effects in theory and reviews empirical evidence of such effects. It considers the widely varying impacts that different types of social protection can have on the distribution of incomes and on economic growth. The paper concludes that, in analysing, assessing and planning social protection, it is crucially important to consider the potential drawbacks – and the benefits.