Since the peak of the economic crisis, poverty reduction in Armenia has made limited progress, withpoverty rates moving from 34.1 percent in 2009 to 32 percent in 2013. This slow pace has been mirroredby the limited progress of the labor market (LM), particularly in terms of job-creation. In 2013, about 36percent of people worked in the agricultural sector, and about half of all workers earned wages throughinformal jobs.These conditions highlight the need to have a robust social protection (SP) system that not only offersadequate protection to people living in poverty but can also serve as a tool to increase the quality ofhuman capital, which in turn can help improve their economic opportunities. The government ofArmenia (GoA) has shown a clear interest in building its infrastructure to deliver SP services throughintegrated social service centers as a means to better harness its investment in SP. Its vision is toultimately implement an integrated social policy that personalizes interventions and tries to addressmultiple constraints that people face when trying to escape poverty— not only through the provision ofcash benefits.The objective of this policy note is twofold. First, it provides a diagnostic of the SP system in order toidentify the key issues that could be addressed to enhance its effectiveness and efficiency to achievegreater poverty reduction. Second, the note outlines a set of options—policies and reforms—for theGoA to consider as it continues to strengthen its poverty-reduction strategy. It is important to note thatthe focus of the report is on social assistance (SA) and LM policies for vulnerable groups. Other keyaspects of SP—such as pensions, labor regulations, or the functioning of the LM as a whole—are notaddressed in this report, and they have been the subject of extensive analysis elsewhere.
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