Taiwan's Social Protection: Shift to Asset Accumulation Welfare Provision
1. By Mark Raygan E. Garcia, MPPG Student, The Education University of Hong Kong
Taiwan’s Social Protection Profile
A Shift to Asset Accumulation Welfare Provision: TFDA Case Study
2. Summary
Historical Footnotes
Approach to Policy Innovation
Compelling Landscape
The Family Development Accounts (TFDA)
TFDA Features
TFDA Rollout
Results
Analysis Against Aging Population
Social Protection Debate
3. Historical
Footnotes
Nationalist government lifted martial law in 1988; end of authoritarian regime;
spurred wider participation among LGUs and civil groups
1991 - Taiwan’s economic slump; income inequality worsened (4.2% in 1980 -
6.39% in 2001); asset value of rich16.8 times higher than poor (doubled by
2001)
1994 - first election in Taipei City; Chen Hsiu-Bien won as mayor; ushered in
many economic and social policy-oriented reforms; responded to need for more
social contracts
Pre-2000: reliant on private/familial transfers; income-based welfare provision
2000: Launch of first poverty anti-poverty campaign (and first PP partnership:
Taipei Family Development Accounts (TFDA); 3-year experimental program
4. Approach to Policy Innovation
Problem
Identificati
on
Networkin
g/Advocati
ng in
Policy
Areas
Shaping
Policy
Debates
Building
Support
Coalitions
5. Compelling Landscape
Targets asset accumulation for
future economic sufficiency
Changing family composition
(extended to nuclear)
Encouraged savings and
employment; decrease welfare
Efficient government transfers
amidst low private transfers
From remedial/curative to
preventive/proactive
Integrate low-income earners
into economic mainstream
6. TFDA Features
“Family” (from “Individual” - in keeping
with filial relations)
Capitalized on Chinese values
highlighting importance of savings and
assets
Savings matching at 1:1 (progressive:
from NT$2,000 to NT$4,000/month)
Program implementation; 3 years (July
2000 - June 2003)
Requirements: (a) current welfare
recipient, (b) employed for at least pas 3
months; (c) per capita income below 60%
mean-consumption expenditure
3 goals: (a) higher education, (b) micro-
enterprise, (b) home purchase
7. TFDA Rollout
Polaris Securities Group (Pai
Chen-Hsi Foundation)
volunteered to raise funds to
finance TFDA - NT$14,4000
(for 100 accounts)
July 2000 - 184 applicants;
100 selected
Recipients: majority female,
41-50 years old; single
mothers and high school
graduates
Of the 100
selected
68 dropped out by end of 2000
Including
replacements
75 made regular deposits for 12 mos
72 continued for another year
3 left due to family emergency
By 2003 69 completed 3-year savings period
8. Note: Monthly deposit levels changed over the years, indicating increased interest in
savings.
Results
10. But let us view Taiwan in the context of its aging population.
11. Analysis Against Aging Population
Birth Rate 8.5
Global Rank:
232
Fertility Rate 1.10
Global Rank:
220
Projected Years of
Aging (65+)
14% (2017), 20% (2025), 30% (2040)
Age Dependency
Ration
12.7 (7.8 working
people support 1
elderly)
Global Rank: 58
12. Social Protection
Debate
Dependency Discourages savings
Sustainability Overburdens government; resource displacement
Utilization Prone to abuse; leakages
Equality / Equitability Disincentive; taxation strains
Political Considerations Costly; divisive; fluctuating
13. By Mark Raygan E. Garcia, MPPG Student, The Education University of Hong Kong
Taiwan’s Social Protection Profile
A Shift to Asset Accumulation Welfare Provision