Strengthening the social protection system and active labour market policies throughout the life cycle in Paraguay

Paraguay is currently navigating two significant megatrends: the demographic transition toward an aging population and the technological change favoring automation. These trends present challenges in both the labor market and the income protection system for the elderly. In fact, the country has one of the world's youngest populations and started to go through its first demographic dividend. However, to fully capitalize the demographic bonus, it is necessary to address the existing gaps in human capital creation and make the necessary investments to ensure that workers can participate productively in the labor market, along with adequate protections and social security benefits. At the same time, the aging population imposes some challenges in the mid and long-term to the pension system which should be addressed shortly. The aim of this proposal is to support the Paraguayan government's policy objectives related to the strengthening of its social protection system and the active labor policies, designed to provide an extensive and adequate coverage against risks of income loss and to enhance the productivity of the labor force. Proposal is focused on the following three areas, given the population's age profile: 1. To identify the barriers that young people, particularly women, face in the labor market and designing public policies to minimize these barriers. 2. To identify the employment risks associated with automation and climate change, and reinforcing tools to improve active labor market policies that facilitate just transitions for workers, with emphasis on female workers, to productive occupations. 3. To support and facilitate the dialogue on potential pension system reforms, in the context of an aging population and fragmented and unsustainable pension system.

Project symbol

PRY/24/51/UND

Admin unit

DWT/CO-Santiago

Start date

11/12/2024

End date

11/12/2026

Total allocation

150000

Total expenditure

Status

Active

94207

Development Partners

Multi Partner Trust Fund Office, UNDP

Country/Countries

Paraguay

Outcomes

Outcome 3: Full and productive employment for just transitions
Output 9.1. Improved coherence in multilateral support for the development and financing of integrated policy responses for social justice through decent work
Output 9.3. Improved coherence in support and action to facilitate a just transition towards environmentally sustainable economies and societies for all
Outcome 7: Universal social protection