Social Protection for Informal Workers
The ILO estimates that there are approximately 2 billion people worldwide working as informal workers. Because of this informality, many of these people are not adequately covered by social protection. The COVID-19 pandemic has further exacerbated the inequality experienced by poor informal workers and as a result, the topic of social protection coverage for this population has become even more urgent.
Understanding the heterogeneity of the informal employment and the different social protection instruments targeted towards informal workers during the COVID-19 crisis was the theme of the “Social Protection for Informal Workers” webinar held on February 17, 2022. The session was organised by the GIZ with the support of the IPC-IG. It was also the 5th webinar on the “ASPects - Practice Exchange on ASP” webinar series, a series organised by the GIZ Global Program Social Protection Innovation and Learning (SPIL) on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) in cooperation with socialprotection.org and other partners.
In this webinar, four panelists presented their findings on the theme. WIEGO Director, Laura Alfers, shared the key findings of a paper she co-wrote with Valentina Barca at SPACE Cooperation on covering informal workers during the COVID-19 pandemic; and World Bank Social Protection Economist, Melis Guven, presented a recent World Bank paper that also looked at covering informal workers, and furthermore, talked about the role of digital systems of data that make digital platforms for interlinking social assistance and social insurance. Rwanda Social Security Board Deputy Director General, Regis Hitimana, talked about experiences with long-term savings schemes that have been implemented in Rwanda. And the independent consultant, Joanne Sharpe, talked about how technology has been used, the challenges, and what could be adapted from Thailand's response to the pandemic.
The full recording of the webinar is available here and the slide presentation here.
Including Informal Workers Within Social Protection Systems: Lessons from COVID-19
The first speaker, Laura Alfers spoke about how the informal economy encompasses a heterogeneous group of workers with different wage levels. They can also be divided into informal wage workers in the formal or informal sector, domestic workers, self-employed workers, among others. Part of this population, especially most of the low-income labor force, has no access to formal employment or social protection. Exploring the different characteristics of the groups that make up the informal worker population is key to creating effective social protection measures that can mitigate the inequality they currently face.
The pyramid graph below shows the heterogeneity of informal economy correlated with earnings.
Source: Webinar presentation
Social Protection for the Informal Economy
Melis Guven added to the discussion by presenting the results of the World Bank paper "Extending Pension Coverage to the Informal Sector in Africa". She explained that social protection played a key role in the response to COVID-19. Countries that had previously invested in social protection systems were able to respond better to the pandemic. Guven pointed out that the pandemic sparked innovation, but also highlighted gaps in resilience to shocks. After COVID-19, governments are more aware of the need to develop and implement new methods to extend social protection coverage to the informal economy. A progressive approach could be offering a voluntary savings scheme to informal workers to access services. Those savings schemes could be managed on digital platforms as she presents in the chart below:
Source: Webinar presentation
Long-term Saving Schemes in Rwanda
Regis Hitimana gave an example of a long-term savings scheme from Rwanda. Ejo Heza is a long-term savings scheme that targets the informal sector. It was initiated after the realisation that only 8% of the working population was covered by any social protection and the remaining 92% had no coverage. To mitigate this situation, the government established this scheme which is open to all Rwandans and foreigners living in Rwanda. According to Hitimana, this scheme is perceived as a great success.
Finally, Joanne Sharpe presented the findings from Thailand. She explained that in Thailand there have been voluntary social security schemes for informal workers since 2015. These existing schemes were key to Thailand’s response to COVID-19. In addition, the country has very high national identity coverage, and it is also a digitised system with electronic payments well accepted by the population. These systems are already in use to provide social assistance. In this context, Thailand's response reached about 30 million individuals in up to 80% of households. Informal workers received benefits, although there were some key categories of people who did not have access, particularly informal or illegal migrants who signed up for these schemes.
The webinar ended with a Q&A session that can be accessed here.
This was the fifth webinar in the "ASPects – Practice Exchange on ASP" series. These webinars are dedicated to bringing together practitioners, leading experts, and policy makers to share and exchange perspectives on Adaptive Social Protection (ASP). Each webinar within the series will focus on specific practically relevant aspects of one related ASP Building Block (Institutional arrangements and partnerships - Programs - Data and information - Finance). The series, organised by the GIZ Global Program Social Protection Innovation and Learning (SPIL) on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) in cooperation with socialprotection.org and other partners, aims at informing the global public policy dialogue on building back better systems and better preparedness for future shocks.