First published in 1948, the International Social Security Review is the principal international quarterly publication in the field of social security.
The socio-demographic characteristics of couriers who work through digital platforms in Mexico reveal that more than 85 per cent of these workers have completed full-time secondary education and 83 per cent of these workers are young (aged 14 to 44). However, only 25 per cent are covered for health services and social security benefits. Against this backdrop, and guided by international experience, we set out a proposal to provide these workers with a tailored package of social security benefits. The proposal would require to categorize couriers who work through digital platforms as “digital workers”, introduce a special scheme for these workers based on voluntary affiliation, and offer a specific portfolio of benefits.
Most jurisdictions grant differentiated and more beneficial treatment – usually in the form of early retirement, and commonly under special pension schemes – to workers in arduous or hazardous jobs. Several justifications for such treatment have been advanced, including i) compensating the worker for the hardship, ii) protecting the worker from the hazard, and iii) realizing the principle of equality in the distribution of costs and benefits in the social security system. This article analyses these functions from a socioeconomic perspective and explains how early retirement for workers in arduous and hazardous jobs is necessary to ensure equality by treating “unequals unequally”, and in proportion to their inequality. Moreover, this article presents a precise formula to calculate when a worker should be allowed to retire, so that workers in occupational domains with a shorter life expectancy do not systematically enjoy lower expected benefits from the pension system while having contributed the same amount. Implications for the design and desirability of special pension benefits are discussed.
Long-term care provision and financing are becoming increasingly important matters in all ageing economies. Therefore, a major challenge for policy makers is to strike a balance between adequate care and sustainable financing. In this study, we evaluate the proposal of a so-called sustainability factor in German long-term care insurance. Considering changes in the beneficiary-contributor ratio, it aims for a rule-based consideration of demographic dynamics to alleviate pressure on long-term care financing. Using the framework of generational accounting, we demonstrate that this proposal could have a relieving effect on finances, depending on the share of involvement of current and future generations. It may offer an option for pay-as-you-go long-term care insurance systems worldwide that need to curb the impact of ageing societies. Therefore, this article addresses policy makers tasked with designing a sustainable financing model for long-term care insurance. It demonstrates that the sustainability factor represents a step towards sustainable finances and, thus, it might be one component of a more comprehensive reform package.
After a decade of unprecedented austerity, Greece abruptly changed the course of pension consolidation in 2022 and implemented the controversial carve-out pension funding approach, whereby a portion of existing pay-as-you-go (PAYG) contributions are diverted to fund individual pension savings, thus undermining the financing of existing PAYG pensions. Although inspired by the World Bank’s 1994 pension privatization blueprint, the Greek 2022 reform features a major policy shift by entrusting the management of individual pension savings to a dedicated government body, ostensibly to try to remedy inherent market failures in private pension provision. Similar to earlier reforms in Eastern Europe, the multi-decade transition costs of carve-out funding have been vastly underestimated in Greece, which will give rise to fiscal distress in the coming years when annual transition costs become sizeable and favourable international financing terms start to change. Unless firm political commitment is established to implement the measures necessary to finance the transition costs, Greece may have to resort to reform reversals similar to those already implemented across Eastern Europe.
Social protection and revenue collection are often regarded as potential drivers of social cohesion. The article joins this debate, providing three main contributions. First, we carefully discuss the concept of social cohesion and endorse one specific definition. Second, we propose using the concept of the “fiscal contract” as the key theoretical lens to understand the often neglected potential joint effects of social protection and revenue collection policies on social cohesion. Third, we illustrate three main mechanisms through which these policies can have positive or negative impacts on the different components of social cohesion and highlight how relevant it is for policy-makers to carefully think about these.
China has adopted an array of special social security measures in response to the spread of the COVID-19 virus, to mitigate the downside social and economic impacts caused by the pandemic. Measures include the reduction, exemption and deferral of social security contributions by employers, the extension of benefits coverage for employees, and the provision of more accessible e-services by social insurance agencies. The article points out that a preliminary assessment of those measures would suggest that they have played a key role in supporting social cohesion and in stabilising the economy. In a critical manner, the article compares the measures adopted in China with those of other countries, and identifies how China could learn from international practice and experience. Finally, and based on recent Chinese experience, the article presents proposals that seek to improve the longer-term contribution made by the Chinese social security system to realise the goals of social cohesion and inclusive economic development. As set out in China’s Social Insurance Law of 2010, the social security system should not only support a fair sharing of benefits of development, but also promote social harmony and stability.
The expansion of social assistance in low- and middle-income countries raises important issues for inclusive growth. Labour is by far the principal asset of low-income groups. Changes in the quantity, quality, and allocation of labour associated with social assistance will impact on the productive capacity of low-income groups and therefore on inclusive growth. The article re-assesses the findings reported by impact evaluations of social assistance in low- and middle-income countries to address this issue. Most studies have tested for potentially adverse labour supply incentive effects from transfers but have failed to find supportive evidence. The article highlights findings from this literature on the effects of social assistance on human capital accumulation and labour reallocation. They point to the conclusion that well-designed and well-implemented social assistance contributes to inclusive growth.
This special issue selectively addresses the relationship linking social security systems, inclusive growth and social cohesion. Inclusive growth and social cohesion are viewed as political expedient and necessary goals for national economies. The desirability of their attainment reflects political pragmatism, the “social contract”, as much as it does a commitment to the wider emancipative goal of social justice. The International Social Security Association (ISSA) has often paraphrased these assertions to argue that there can be “no social justice without social security”. Of course, progress achieved towards the realization of the goals of inclusive growth and social cohesion should be equally beneficial for the adequacy, sustainability and coverage of social security systems. The aim of this special issue is to unpack and better understand the nature of this relationship.
This article investigates the barriers to informal workers’ voluntary participation in Kenya’s national health insurance scheme – the National Hospital Insurance Fund. Based on primary data from both qualitative and quantitative methods, we find that the key determinants of enrolment include social factors, such as marital status, which create demand for insurance, and the role of informal workers’ associations that promote the voluntary uptake of health insurance and prevent default through contribution support. Participation barriers and reasons for inactiveness stem from the nature of informal work characterized by irregular earnings, which combine with apprehension about having to pay penalty charges for the late payment of premiums, inadequate levels of knowledge about health insurance schemes, institutional constraints such as complex registration procedures, as well as premium costs and poor-quality services, all of which discourage enrolment or the reactivation of lapsed membership. There is thus a need for health insurance schemes, such as Kenya’s National Hospital Insurance Fund, to educate informal workers on insurance services and protocols and to improve services to encourage uptake and reduce default behaviour.
The COVID-19 pandemic has exposed the vulnerability of those who are inadequately covered by social protection in more and less developed countries alike, and has exacerbated the fragility of a social contract that was already under strain in many countries. A weak social contract in the context of an exceptional crisis poses a very real risk to social cohesion. Nevertheless, many States have reasserted themselves as the guarantor of rights by protecting public health and incomes. By sustaining these measures, economic recovery will be supported which will help minimize risks that may weaken social cohesion. However, this is a fast-moving, inherently unstable and protracted crisis. Social protection stands at a critical juncture. Decisive policy action will be required to strengthen social protection systems, including floors, as one of the cornerstones of a reinvigorated social contract.