Extending pension coverage in Cambodia: The governance and investment challenges of the Social Security Investment Fund

Rapid economic growth, declining fertility and changes in family structures have encouraged the Kingdom of Cambodia to reform its old-age pension system. The Government of Cambodia reached an important milestone in 2019, when the Law on Social Security was promulgated. The Law includes provisions for a compulsory defined benefit pension scheme, establishing a sound framework for extending compulsory pension coverage beyond the public sector to formal private-sector workers. As a future step, the compulsory pension scheme should be extended to informal workers. To accompany the reform, the investment policy for the pension scheme’s reserve funds, including the supervisory regime and investment strategy, will be essential for the modernization of the Cambodian social security system. In this regard, Cambodia has successfully sought policy advice. However, the country should continue to seek further advice, and to act on this. Otherwise, the necessary and increasingly pressing policy ambitions of Cambodia to develop an adequate and sustainable social protection system may not be fully realized.     

Work histories and workers’ failure to satisfy pension contribution requirements: A comparison of Mexico and Uruguay

Comparing Mexico and Uruguay, this article examines the work history of workers and the challenges they face to satisfy the minimum contribution period for eligibility to receive a contributory old-age pension. Administrative data on work histories is used to formulate a survival model aimed at estimating hazard rates of entering and transitioning out of a given contribution status. This model is then used to perform a Monte Carlo simulation to forecast contribution histories. Results suggest that the hazard rate is negatively associated with the length of a worker’s spell in his or her current status and warn that, both in Mexico and Uruguay, a significant group of workers will find it difficult to gain entitlement to a contributory pension in old age. The manner in which each of these national systems has addressed the challenges associated with low contribution densities may explain the two countries’ very different coverage results.     

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.     

The risk of under-insurance in the Finnish statutory pension scheme for self-employed workers: A trajectory analysis

Using unique data on the contribution base, we investigate under-insurance within the statutory pension scheme for self-employed workers in Finland. Under-insurance is defined as the difference between pension-declared income and tax-declared income. The trajectory modelling technique applied has allowed us to estimate the levels of under-insurance for different subgroups and to identify possible explanatory factors. Under-insurance is found to be persistent and large. The analysis reveals six distinctive and homogenous sub-groups of self-employed workers. Close to 84 per cent of these workers pay too little in contributions, often leading to inadequate protection against personal risks. Especially for lower-income self-employed workers, this points to myopic behaviour as regards contributing to the self-employed statutory pension scheme and calls for fine-tuned economic incentives.     

Inequity in access to the Argentinian pension system (1994–2017)

Pension coverage in Argentina is inequitably distributed between different income levels, both during working years and during retirement. The objective of the article is to study the evolution of inequity in access to the Argentinian pension system in terms of its association with the socio‐economic status of individuals during the period 1994–2017. An evaluation is offered of how variables such as sex, age, and educational attainment influence such inequity. It is concluded that, although the level of average coverage increased, inequity in access increased significantly in the years following the 1994 reform, both among the active and the inactive population. However, inequity in access among active persons did not improve substantially with the return to the pay‐as‐you‐go pension system, while it was considerably reduced among the inactive population. While the former are found to be affected to a greater extent in terms of coverage as a result of the pro‐educated bias among the active population, the latter outcome is thought to be a direct result of the transitory plan (Pension Inclusion Plan) for pension inclusion, after which inequity was to resume its upward course.     

Social health insurance development in Mongolia: Opportunities and challenges in moving towards Universal Health Coverage

Mongolia achieved high population coverage under mandatory health insurance relatively quickly. This fact was viewed by policy‐ and decision‐makers as a central issue for health financing reform in Mongolia. Health insurance brought many new features for health service planning, provision, funding and resource management. Based on initial achievements, health insurance came to be strategically considered as the vehicle for achieving universal coverage. The article analyses developments in Mongolia's health insurance over the last decade along with the core policy dimensions of Universal Health Coverage. It examines various reform approaches and the numerous amendments to laws that have been implemented during this period and discusses new opportunities as well as challenges. The analytical review and findings discussed suggest that Mongolia has a need for evidence‐based policy decisions and informed political support, with health insurance backed by robust institutional and administrative capacities. More generally, it also emphasizes that health policy goals and objectives can be attained by strengthening and making transparent and publicly‐accountable all health system financing functions and arrangements. The policy analysis, experiences, lessons and proposed strategies presented with regard to Mongolia intend to stimulate wider discussions on health insurance development as well as promote continuing focused research on specific aspects of health insurance and public financing 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 reforms in Kenya: Towards a workerist or a citizenship‐based system?

With social security provisions in Kenya remaining under‐reported in the more recent literature, this overview covers recent reforms in key areas of the country's social security system. In the health sector and in old‐age pension provision social security is still mainly workerist (biased toward those in formal employment), and attempts to expand coverage have had limited effect only – cash transfer programmes, for instance, have been expanded but in practice they do not universally cover the entitled categories. Thus, although the Kenyan social security system now has a considerable pro‐poor social assistance component it remains biased toward those in formal employment, to the benefit of the highest income quintile.     

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?     

Digital social security accounts for platform workers: The case of Estonia’s entrepreneur account

Advancements in technology enable new opportunities for creating digital social security accounts, but the effectiveness of these to solve the accessibility and eligibility issues facing platform workers has not been assessed fully in the literature. The potential of digital social security accounts lies in their ability to consider the possible different streams of income of atypical workers and to improve the effective access of these workers to social security. Tax and social security offices can now exchange information on the income of platform workers in real time, which offers the promise of formalizing the previously informal casual work relationships of the self-employed. This article explores the case of the Estonian entrepreneur account as a digital hybrid solution for improving the effective access to social security of platform workers. Digital portable accounts create the conditions for the structural improvement required to respond adequately to meet the changing social security needs of atypical workers. However, this also requires that the policy design be thought through carefully, to avoid digital portable accounts being simply a digital facilitator of outdated solutions.