2022
Langue
Anglais

Egypt’s reformed social insurance system: How to incentivize enrolment?

In 2019, the Government of Egypt has issued a new legal framework for its social insurance system. Aside from providing a unified scheme covering different groups of workers, the new regulation provides for systemic and parametric reforms that are aimed in large part at addressing the challenge of workers’ low enrolment in social insurance, with an emphasis on informal workers. The reforms have reduced the rate of contributions paid by employees and employers; increased the penalties for employers who do not register their workers; and improved the benefits structure. The law also specifies provisions to facilitate the enrolment of informal workers by offering to cover the employer’s share of their contributions. However, the law limits such improved access to nine specific categories of informal workers, a decision that fails to recognize the diversity of informal forms of work. Based on the analysis of the characteristics of contributors to the previous system, this article argues that the large percentage of low-earners and informal enterprises in the economy will likely continue to be a hindrance to expanding enrolment in the system despite the legal reforms.