Including informal economy workers in contributory social protection: Current challenges in Latin America

Owing to a favourable economic situation and to national labour market and social protection policy reforms, Latin America has witnessed significant progress in social protection coverage. Some countries, however, have seen weaker progress, with stagnant coverage levels. Several factors underlie the extension of pensions and health care coverage and the formalization of the labour market: substantial improvements in the quality of employment, more flexible eligibility criteria for contributory coverage, and the strengthening of the supervisory and regulatory roles of the State. This article first addresses the link between social protection and informality in Latin America to show the relationship between informal labour markets, the lack of social protection and the scale of unpaid contributions. Also highlighted is regional progress in extending social protection as a result of labour market formalization. Countries in the region have used various policies to encourage formalization and these have also helped to reduce wage inequalities, since formalization has had especially beneficial effects on low‐income sectors. Finally, we discuss dichotomous views on social protection financing in the region that tend to place contributory and non‐contributory financing in opposition to one another but do so in favour of the latter, tend to support proposals for limited coverage, and which do not challenge the stratification of access to social protection. The move towards a convergence of benefits is deemed essential: strategies to universalize social protection in the region should not focus exclusively on increasing resources, but must address institutional change as a crucial part of the locus of innovation.     

Extension of social insurance coverage to informal economy workers in China: An administrative and institutional perspective

This article reviews administrative issues in the context of decentralized social protection in China. In particular, what are the main obstacles to expanding social insurance coverage for workers in the informal economy? Over the last two decades, China has achieved remarkable progress toward universal social protection when this target was set as a national policy priority. However, the social insurance enrolment of informal economy workers still lags significantly behind. This article reviews the application of the International Labour Organization’s definition of informality in the Chinese context and overviews existing pension and health insurances in China. This article discusses the impact of China’s inter‐governmental fiscal relations and decentralized social protection in the multilevel government system. The article highlights that under a system of decentralized managed social insurance many informal economy workers choose to opt out of the system because of low benefits and high compliance costs. This result in deficits in social insurance coverage amongst informal economy workers.     

Work,social protection and the middle classes: What future in the digital age?

The digitalization of the economy can be interpreted as an industrial revolution, a series of technological innovations associated with new practices and new business models. As for previous industrial revolutions, a phase involving the destruction of existing systems and structures is driving a profound transformation of the world of work and the development of new sectors of activity and new jobs, including changes in the labour market and in the types of jobs created. This puts into question the position of the middle classes, and presents new challenges for social protection. This article seeks to understand the impacts of digital technology on the economy and employment, including the phenomena of labour market polarization. It describes the new forms of employment and work and analyses the social risks and the likely ramifications for the middle classes in the digital age. In turn, new possibilities for social protection in the digital age are discussed. The article concludes that there is a need to re‐evaluate jobs that involve the provision of personal and care services, including to support social investment, to strengthen the future prospects of the weakened middle classes.     

The regulatory challenge of occupational safety and health in the online platform economy

The online platform economy raises a range of intricate legal questions connected to labour law and social security protection. In particular, the atypical forms of labour relationships used by many online platforms (e.g. multilateral, hyper‐temporary, off‐site, autonomous), often contractually defined as independent contracting, have challenged the application of labour and occupational health and safety law in many countries across the world, as the application of these norms tends to be dependent on the existence of an “employment relationship”. These developments are compounding the general increase in atypical employment, especially as a result of the 2007–08 financial and economic crisis. It has mostly fallen to courts to resolve the disputes between online platforms and their online platform workers, but some European Union (EU) Member States (such as France) have taken specific legal measures in response to these difficulties. Also, the EU‐level as such is becoming increasingly involved, with the Court of Justice’s ruling in the case of Uber providing some guidance on the “employment question”, and a pending legislative initiative on a Directive for Transparent and Predictable Working Conditions which may provide minimum labour protection for online platform workers in the EU. This article analyzes the problem of labour law in the online platform economy and surveys the various responses by courts and policy‐makers across the EU, which may furthermore set the tone for developments outside the EU in this area.     

Social Policy in Greece: Rhetoric versus Reform

This paper reviews the major social policy developments in Greece during the 1980s and 1990s, focusing on social security, health and employment policies. It argues that the concept of social policy and the practice of politics have been distorted in this country. Social policy reflects the legacy of a heavily politicized and centralized policy‐making system, an impoverished administrative infrastructure and poorly developed social services. Its emergence is characterized by the pursuit of late and ineffective policies. It lacks continuity, planning and coordination, being oriented towards short‐term political expediency. It is largely insurance‐based, reproducing huge inequalities and institutional arrangements which are behind the times. It provides mainly cash benefits, low‐quality but rather expensive health services and marginal social welfare protection. Moreover, the lack of a minimum income safety net confirms the country's weak culture of universalism and social citizenship. By implication, complex policy and interlocking interest linkages have tarnished the “system” with a reputation for strong resistance to progressive change. At the same time, sources of change such as globalization, demographic developments, new household and family/gender patterns, unstable economic growth, fiscal imperatives, programme maturation, as well as persisting unemployment, changing labour markets and rising health care costs, have produced mounting pressures for welfare reform.     

Introduction: Social security and the digital economy – Managing transformation

This special issue of the International Social Security Review considers the multidisciplinary topic of social security and the digital economy. The selected articles that comprise this issue offer a number of varying perspectives on the changing and increasingly complex environment in which social security institutions operate and critically assess not only how social security institutions are likely to be impacted but also how they may respond to the challenges foreseen. Social security institutions do not have control over external factors that can negatively impact the financing and coverage of social security programmes. Nonetheless, with the shift to the digital economy, the task at hand is to manage an unprecedented process of change. Though ensuring service continuity is the primary concern, also required are improvements in service delivery for all stakeholders and the development of responses to meet new operational challenges and emerging coverage risks. Particularly in more developed economies, the socio‐economic challenges that accompany the labour market changes associated with the transition to the digital economy are often characterized as presenting a risk of growing precarity. Regardless, the global policy goal remains one of ensuring sustainable and adequate social security protection for all.     

Social Security for the Informal Sector: A New Challenge for the Developing Countries

Informal sector workers constitute a large and increasing part of the labour force in most developing countries. Many of them are not able or willing to contribute a significant percentage of their incomes to finance formal sector social insurance benefits that do not meet their priority needs. Therefore, informal sector workers themselves need to (and have) set up health and other social insurance schemes that better meet their needs and contributory capacity. In addition, special social assistance schemes are necessary to protect the most vulnerable groups outside the labour force. This article also assesses some key implications of these developments for formal social insurance schemes.     

Social protection systems and the future of work: Ensuring social security for digital platform workers

Digitalization is transforming societies and economies worldwide at an unprecedented scale and pace. In the wake of automation and digitalization, new forms of employment have been emerging in various occupations and sectors, such as the digital platform economy. The emergence of new forms of employment, such as work on digital platforms, requires that existing social protection systems adapt to the specific situation and needs of such workers, as to realize the human right to social security for all. Current social protection coverage for workers on digital crowdwork platforms reveals significant gaps in social security coverage. Where such coverage exists, it is often provided through the workers’ previous or additional jobs, or indirectly through their spouses or other family members. This raises questions about digital platforms free riding on the traditional economy with regard to the financing of social security. How can social protection systems adapt to changing forms of work to ensure full and effective coverage for workers in all forms of employment, including those in “new” forms of employment? How can workers in all types of employment, including those on digital platforms, be protected in an adequate and comprehensive way, combining contributory and non‐contributory mechanisms and based on equitable and sustainable financing mechanisms, so as to ensure adequate social protection to all?     

The digital economy and the future of European welfare states

As a consequence of new technology, labour markets are changing. This article’s central aim is to discuss variations among welfare states in Europe to adjust to changing labour markets. These variations in adjustment suggest that some welfare states are more prepared than others, including their capacity to ensure their sustainable financing. In the years to come, the predicted impact of technological development on labour markets will be huge. Impacts will include stronger “dualization” and new cleavages between “insiders” and “outsiders”. Fewer industrial jobs are to be expected, and service‐sector employment faces a risk of decline due to automation. While the creation of new jobs is likely, it remains to be seen whether these will replace the number of jobs destroyed, leaving the risk that many people whose skills become obsolete will become unemployed in the short as well as the longer term. Furthermore, even if the same number of jobs are eventually created, there will be a period of transition. In the light of this, welfare states will be challenged, not only in how they can finance their activities but also in terms of the threat posed to social cohesion by emerging labour market “winners” and “losers”, with an accompanying higher risk of increasing inequality. The article offers suggestions as to how welfare states may cope with the changes related to the financing of welfare states, and how active labour market policy can be part of the response to help alleviate the expected dramatic changes. Also required is a discussion on the annual average number of hours people will work and how this might be a factor in lower future levels of unemployment.     

Longevity insurance annuities: China adopts a benefit innovation from the past

Longevity insurance annuities are deferred annuities that begin payment at advanced older ages, such as at age 80. Such annuities would benefit some older retirees who have drawn down their savings, but the private sector has problems in providing them. Originally, social insurance old‐age benefits programmes in some countries were structured as longevity insurance programmes, with 50 per cent or less of those entering the workforce surviving to receive the benefits. Over time, however, as life expectancy has improved, the benefits these programmes provide have slowly transformed into benefits that most people entering the workforce ultimately receive. This article argues that the reintroduction of longevity insurance benefits as part of social insurance old‐age benefit programmes could be an important policy innovation, in particular because this benefit is generally not provided by the private sector. China has introduced longevity insurance benefits as part of its social insurance system, offering a model for other countries, particularly those providing modest social insurance old‐age benefits.     

Gender inequalities in European unemployment benefit systems

The most important structural change which has occurred on the labour market over the past 30 years is the sustained and continued growth of female labour supply. Two-earner couples have become a majority in most European countries and lone parents, mostly women, are also on the rise. On the other hand, since 1975, labour market policies have altered the quality and nature of employment in Europe by promoting atypical forms of employment where women are overrepresented. The analysis has shown us that atypical employment results in restricted access to unemployment benefits. Moreover, combining the presence of more stringent conditions with derived rights results in more and more women being dependent upon their spouses for financial as well as social protection and can even have a disincentive effect on formal labour market participation.     

Combining Welfare-to-Work Measures with Tax credits: A New Hybrid Approach to Social Security in the United Kingdom

The changes described in this article reflect a shift in social security away from social insurance and towards a mixture of social assistance, occupational or private insurance and tax credits. It suggests that what is new and distinctive about UK social security policy is the way in which a new strategy has been forged by linking the New Deal, which provides job opportunities for people who are not in employment but can often only offer them low-paid jobs, with tax credit schemes, which provide in-work benefits and are designed to ensure that, if necessary, people accept poorly paid employment.     

GAUGING NEW ZEALAND'S SUCCESS AT POVERTY REDUCTION IN THE NEW MILLENIUM

This paper presents the results of the New Zealand Poverty Measurement Project's analysis of the effects of the 1990s social reforms in New Zealand on the incidence and severity of poverty, and assesses the impact of five social and economic policies introduced by the Labour‐led coalition governments since 1999: New Zealand superannuation, income‐related rents on state houses, active labour market policies for an employment‐rich economy, the Primary Health Care Strategy and the planned income support policy to reduce child poverty. Superannuation is assessed as both adequate and sustainable, rents for state houses are found to be affordable, and GDP growth and employment have increased incrementally as unemployment and benefit numbers have decreased. The Primary Health Care Strategy is an innovative initiative that will increase affordable access to general practitioners, but it and the proposed child assistance initiatives are too new to be adequately assessed. Of the challenges that remain, policy priorities should centre on housing alternatives, including home ownership for low‐income households not in state houses; income support for poor households, particularly those with children; and multi‐sector development of education and training aimed at lifting economic and social capacity.     

Evaluating social investment in disability policy

Disability policy in European countries is displaying a shift towards social investment: increasing human capital and access to the labour market. The reasoning that underlies this transition is that disabled persons would benefit from mainstream employment, but are impeded in traditional policy by deficiencies in labour supply and demand. However, the shift towards more activating policies in many countries is accompanied by a decline in social protection. It is unclear whether social investment may effectively promote the employment chances of disabled persons within this context. The present research examines this question through a quantitative, cross-sectional, multilevel analysis on microdata from 22 EU countries. Our findings suggest greater activation to predict lower employment chances, while reducing passive support shows mixed effects. Conversely, measures for facilitation in daily life predict greater employment chances, as do measures for sheltered work. These findings raise questions over the value of social investment for disabled persons—and underline the need to overcome broader barriers in the labour market and in society.     

Inhospitable workplaces? International students and paid work in food services

Most international students in Australia take up paid work during their studies, generally as part‐time employees in low‐wage, low‐skill labour markets. Though little is known about the detail of their work experiences, scattered reports suggest that wages and working conditions are often poor and pose significant issues of social justice. This article examines the characteristics of jobs held by one group of international students, drawing on in‐depth qualitative interviews that form part of a case study of Melbourne's café, restaurant and takeaway food services sector. The evidence indicates that precariousness in employment is widespread in this sector and that it centres on underpayment and non‐payment of wages, in breach of labour regulation. The article suggests that such illegal employer practices are facilitated by use of undeclared casual work. Underpayments are most severe in what are typically regarded as ethnic cafes and restaurants, which concentrate on employment of international students, but they are also widespread in mainstream cafes and restaurants, where international students share precarious work conditions with other workers. The findings underline the case for more concerted research and new policy initiatives.     

Killing the Golden Goose? Third Sector Organizations and Back‐to‐Work Programmes in Germany and the UK

Third sector, or not-for-profit, organizations have been viewed in many parts of Europe as agencies that can be harnessed by public policy programmes to support the socially excluded. Within the emerging mixed economy of welfare, third sector agencies offering training, support and employment for groups disadvantaged in the labour market provide an important example. This illustrates, from one specific field, the dynamics occurring at the interface between public and third sectors in the delivery of public policy goals. This article examines both the history of 'partnership regimes' in this field and the evolving local organizational arrangement. The developments in the contrasting welfare regimes of Britain and Germany, which exemplify different institutional traditions, are analysed. The potential impact of regulatory changes on the capacity of third sector work integration agencies to deliver policy goals is assessed in both countries using evidence from recent case study research. The analysis suggests that the emerging managerialist partnership structures are tending to convert third sector organizations into 'just in time' deliverers of poor programme outcomes in both welfare regimes while also eroding their distinctive potential to provide more than mere labour market integration.     

The Political Consequences of Outsider Labour Market Status in the United States: A Micro‐level Study

This article contributes to recent research that seeks to understand the political consequences of ‘outsider’ labour market status. There is an emerging consensus that labour market outsiders have systematically different policy preferences and display systematically different political behaviour to securely employed ‘insiders’ in Europe. Yet the political consequences of outsider status in the USA are less clear. They may be expected to differ from those that have been documented in the European context, because: (1) the USA is characterized by low employment protection of insiders; and (2) there is evidence that Americans are more reluctant than Europeans to hold governments responsible for personal economic hardship. We therefore use the General Social Survey to examine how outsider labour market status is related to voting behaviour and to social policy preferences in the USA. We find that the concept of ‘labour market outsider’ – as conventionally operationalized – holds little explanatory power in the American context. Disaggregating the outsider category, our results suggest that the political consequences of outsider labour market status may be contingent on individual beliefs about government responsibility.     

The protection of atypical work in the Australian, British and German social security systems

It is a common feature of Australian, British and German social security law to exclude atypical work from many normal standards of protection. Social insurance and occupational welfare law still concentrate on the standard employment relationship, as they use length and continuity of employment as the major criteria for distributing benefits, and means-tested systems put those who depend on different sources of income, as most atypical workers do, at a disadvantage. However, equal treatment and even promotion are granted to one type of atypical work: the combination of domestic and atypical labour market work. Examples are the law of unemployment insurance in Great Britain and Germany, the family components within the social insurance schemes, the special British and Australian means-tested benefits for the working poor family, and parental leave legislation in Germany.     

Decent work for sustainable development in post‐crisis Nepal: Social policy challenges and a way forward

Although the Decent Work agenda has received significant attention in the context of sustainable development, the formulation and implementation of appropriate social policies in developing countries remain an underexplored subject. This article responds to this gap and traces country‐specific Decent Work related policies and programs in Nepal—which is recovering from two major crises: a decade‐long armed conflict that ended in 2006 as well as the 2015 earthquake. Drawing on Critical Policy Analysis framework, this article examines how key tenets of the International Labour Organisation's Decent Work platform, namely creation and provision of employment, social protection, social dialogue and rights at work have manifested in Nepal. The findings indicate that while attempts have been made to embrace the Decent Work agenda into social policies and programs, structural instability of political processes means that there is a lack of strategic directions to address a capacity deficit specific to the informal sector and outbound labour migrants. The article makes broader analytical contributions towards evaluating the implementation of social policies driven by the global priority in the context of developing nations with weak governance settings. In countries like Nepal, where the majority of workers are located within the informal sector and as such the administrative reach and effectiveness of Decent Work related social policies designed for the formal sector are limited.