Overcoming Dependence on Social Assistance – What is the right approach for Georgia?

Abstract

This paper examines the effectiveness of welfare-to-work strategies in Georgia, focusing on the relevance of “work-first” and “human capital development” approaches in a labour market characterized by high informality. Contrary to conventional assumptions, many social assistance beneficiaries are already economically active in Georgia, predominantly in informal and low-productivity jobs. The policy challenge, therefore, is not activation per se, but facilitating transitions into stable and formal employment. Drawing on desk research this paper shows that existing incentive structures, combined with limited availability of quality jobs, constrain sustainable labour market integration. In this context, work-first policies are unlikely to produce long-term gains, as they risk reinforcing a low-skill equilibrium. While a human capital approach offers a more sustainable pathway, its effectiveness is constrained by weak labour demand and underdeveloped employment services. The paper argues for a hybrid model in which human capital development serves as the strategic direction, complemented by selective work-first elements. The findings highlight the importance of aligning activation policies with labour market structure in economies with high levels of informality.