social protection and the informal economy koen rossel-cambier, social protection programme
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Social protection and the informal economy
Koen Rossel-Cambier, Social Protection Programme
Social protection and the informal economy
Koen Rossel-Cambier, Social Protection Programme
ILO objective on Social Protection
ILO objective on Social Protection
Enhance
the coverage and effectiveness of the Social Protection
for
ALL
Long-termLong-termpermanentpermanentdisabilitydisability TemporaryTemporary
disabilitydisability
SurvivorsSurvivors
Short-termShort-termbenefitsbenefits
Family Family allowancesallowancesLong-termLong-term
benefitsbenefits
EmploymentEmploymentinjury injury
benefitsbenefits
MaternityMaternity SicknessSickness
PensionsPensionsInvalidityInvalidity
SurvivorsSurvivorsOld-ageOld-age
UnemploymentUnemploymentbenefitsbenefits
CONVENTION No. 102CONVENTION No. 102
Medical Medical carecare
Why social protection?Why social protection? Minimum standards of social needs for nine main social security
branches in following benefits (ILO Convention No. 102) : – Sickness benefit– Maternity benefit– Old-age benefit– Invalidity benefit– Survivors benefit– Family benefit– Employment injury benefit– Unemployment benefit
– Medical Care A wider definition of social protection inludes as well :
– housing – social exclusion/social assistance
Provision of basic universally available
services
Creation of an environment for development of additional voluntary retirement income and access to private health services
OBJECTIVES OF SOCIAL PROTECTION SYSTEM
OBJECTIVES OF SOCIAL PROTECTION SYSTEM
Availability of incomemaintenance benefits
Direct transfers frompublic budgets fundedby the tax system
Contributions from employers and
employees
Income derived fromsaving accumulatedover a working life
RESOURCES NEEDEDRESOURCES NEEDED
BASIC FUNCTIONS OF MODERN SOCIAL PROTECTION SYSTEMS
BASIC FUNCTIONS OF MODERN SOCIAL PROTECTION SYSTEMS
A safety net function, which should ensure that each member of the society facing destitution is provided with the minimum level of cash income, health and social services that allows the member to lead a socially meaningful life;
An income maintenance function, which permits economically active members of society, or all residents, to build up entitlements that allow them to maintain a decent standard of living during periods of unemployment, sickness, maternity, old age, invalidity and survivorship, when other forms of income and activity are not possible.
MULTI-TIERED SYSTEMMULTI-TIERED SYSTEM
A universal tier
Anemployment-related social
security tier
Acomplementary
tier
Financed byProvide
A range of incomemaintenancebenefits and health care services
Additional cash benefits and healthcare services
Employers’ and employees'contributions
Supplementaryemployment-related schemes on voluntary or compulsory basis
Individual savings
Flat-rate benefits and basic healthservices
Annual basisfrom taxation
Present SituationPresent SituationPresent SituationPresent Situation globalization and flexibility of labour
markets 80% of world population insufficient
coverage 50% of world population – no SP majority of those in developing countries majority of those in informal economy particularly women
Group of non-coveredGroup of non-covered
Self-employed, in small and medium size enterprises and growing informal economy, rural and urban areas
Unpaid family labour, mainly in agriculture Disabled persons Casual and intermittent workers Women workers, mainly domestic
workers.
Reasons for low coverageReasons for low coverage
Conventional social security use the employer/employee relationship as a basis for coverage
Low and irregular income of informal economy workers reduce their capacity to make contribution
Ignorance of social security rights and obligations Legislative requirements, particularly those concerning
employment status, exclude some informal sector workers from participation
Bureaucracy geographic accessibility of social protection institutions
Redistribution: A Vicious Cycle Redistribution: A Vicious Cycle
• Income poverty leads to ill health– Half of the burden of communicable diseases is
concentrated in the poorest 20%– Globally the poorest 20% experience three and a
half the mortality of the richest 20%, an equivalent to excess mortality of nearly 10 mil. deaths per year
• Ill health contributes to poverty– Recent studies attribute a 20% loss of GNP in Sub-
Saharan Africa to malaria– Studies in East Asia show that 50% of financial
crises in poor families are triggered by catastrophic illnesses including TB, HIV and severe malaria
RedistributionA Vicious Cycle
RedistributionA Vicious Cycle
Income Poverty
Ill Health, MalnutritionHigh Fertility
Food SecurityHousehold caring practicesFemale illiteracyAccess to water sanitation, low access to preventive and basic curative care etc
Health care is a high proportion of health expendituresCatastrophic illnesses increase economic vulnerabilityLoss of wages, economic opportunities
Poverty
Strategies for Extending SPStrategies for Extending SPStrategies for Extending SPStrategies for Extending SP
Vertical extension:– Social security services– HIV/AIDS– OSH– Quality and access
Horizontal extension– Strengthening of “classic” schemes:
• Extending social insurance schemes• Universal benefits• Social assistance
– Encouraging decentralized mechanisms– Creation of linkages between both
FORMAL SOCIAL PROTECTION SYSTEMS: COMPONENTS
FORMAL SOCIAL PROTECTION SYSTEMS: COMPONENTS
Social security systems:statutory employment-related benefits
(pensions, short-term cash benefits,social health insurance)
Universal social benefit systems:benefits for all residents (family allowances,
public health services, demogrants for old age)
Private benefit systems:employment-related or individual benefits (occupational pensions, employer-provided
health insurance)
Social assistance systems:poverty alleviation benefits in cash and kind
for citizens and residents in special need
THE STRUCTURE OF A FORMAL NATIONALSOCIAL PROTECTION SYSTEM
THE STRUCTURE OF A FORMAL NATIONALSOCIAL PROTECTION SYSTEM
NATIONAL SOCIAL PROTECTION SYSTEM
Familybenefits
Healthcare
Others
Universalschemes
Socialassistance
Socialcare
Incomesupport
Others
Socialinsuranc
e
Pensions
Short-termbenefits
Healthinsurance
Others
Occupationalpensions
Privatehealth
insurance
Others
Privateschemes
Social health
insurance
Social health
insurance
UNIVERSAL
SERVICES
UNIVERSAL
SERVICESSOCIAL
ASSISTANCESOCIAL
ASSISTANCEMicro-insuranceMicro-insurance
Defined by law
Public / semi-public
Contributions
Amongst contributo
rs
Defined byMIS
Private
Workers and
families
Contributions workers and employers
all
Taxes Taxes
Redistribution to poor
Defined by law
Only for defined categories / law
or private
Public Public / NGOs
Four approaches Four approaches
Financing
Administration
Services
Coverage
Group work 1. The lawyers of the extension of social protection in health
Group work 1. The lawyers of the extension of social protection in health
Each group defends a different approach for the extension of social protection :– HMIS– Universal benefits– Social health insurance– Social Assistance– Private insurance
A lawyer of each group tries to find the inconveniences of the other approach and defends its own approach
A committee of judges will make a final judgement
HMIS Social
Assistance
Social health insurance
Private insurance
Universal coverage
Avantages -Solidarity-Based on needs-Participation of beneficiaries
-Solidarity-Focus on poor-Needs based
-Solidarity-Pooling: contributions of workers, employers and state
-Access to quality services-Adapted to needs-Private management
- No heavy administration of contributions or benefits - No exclusion
Disadvantages
-Limited resources and benefits-Limited risk pooling-Limited access to public funds
-expensive-management-criteria
-exclusion informal economy
-Expensive-Exclusion of poor and risk categories
-Expensive: public funds needed-Quality problems if no monitoring
Health insurance: Lessons and issues for middle-income countries
Health insurance: Lessons and issues for middle-income countries
The achievers: South Korea and Costa Rica (political commitment, public expenditure and formal labour force).
Striving for universal coverage: Colombia and Tunisia (fast-track versus gradualist; effective design and organization; constitutional commitment).
Policy issues: (i) when to go for universal compulsory coverage? (ii) how to deal with the self-employed? (iii) impact of voluntary associations.
Low-income countries: Micro-insurance and area-based schemes
Low-income countries: Micro-insurance and area-based schemes
Efficient solution to immediate needsHow to up-scale: training in design and
management; monitoring and regulation; co-financing arrangements; re-insurance.
Experiment with area-based (health) insurance schemes, (district level in India)
Dealing with health care can be fun!Dealing with health care can be fun!
The global campaign on social security and coverage for all
The global campaign on social security and coverage for all
Aim: Extend coverage to all (access to health care and income security)
Different approaches to extension: Extend statutory schemes Improve governance and design New schemes for uncovered groups Community- or district-based schemes Working together with actors and institutions.
Initiatives on the Extension of Social Security by the ILO
Initiatives on the Extension of Social Security by the ILO
1. Extending social security through social dialogue.2. Special programme for Portuguese-speaking African
countries.3. The Global Social Trust Pilot Project4. Strengthening community-based social security
schemes5. Extending health care coverage in Latin America and
the Caribbean6. The Africa initiative7. Training programme on the extension of social
protection
THANK YOU THANK YOU
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