Abstract
The study investigated the effect of institutional mechanisms of micropension saving (MPS) schemes in extending coverage to informal economy workers. We used mixed methods as the research approach, and collected both quantitative and qualitative data for analysis. Using principal component analysis, multiple regression analysis and interpretative approaches that yielded themes, we concluded that more access provision, incentives and security result in increased informal economy workers’ participation in MPS. However, general form of financial information to informal economy workers was found to demotivate enrolment onto the scheme. Consequently, we recommended that corporate pension trustees should create institutional structures like pension education campaigns on national television and radio to promote the culture of pension saving.
Highlights
Reports across the globe suggest a surge in informal economy workforce, with statistics from International Labour Organisation (ILO) (2018) indicating that informal employment excluding agriculture in Africa is 80%, while those for Latin America and Asia are 55% and 85% respectively
These large segments of the labour force make the delivery of Micropension Saving (MPS) appropriate in order to forestall any risk of workers falling into extreme poverty, which is consistent with Goal One of the United Nation's Sustainable Development Goals (United Nations [UN], 2017)
Previous empirical studies (Afenyadu, 2014; Adzawla et al, 2015; Asante, 2016; Darko, 2016) attribute the low coverage of MPS schemes to inaccessibility of the schemes, inadequate pension information and lack of incentives, making them the main barriers limiting informal economy workers’ enrolments in MPS schemes in Kumasi, Accra, Koforidua and Tamale Metropolis. These barriers bring into question the hypothesis of the Institutional Theory of Savings (ITS) that access, incentives, information, facilitations, expectations, restrictions and securities offered by institutions lead to savings accumulation, and raise the opportunity to interrogate these institutional mechanisms involved in extending MPS coverage to informal economy workers in the Greater Accra Region of Ghana
Summary
Reports across the globe suggest a surge in informal economy workforce, with statistics from International Labour Organisation (ILO) (2018) indicating that informal employment excluding agriculture in Africa is 80%, while those for Latin America and Asia are 55% and 85% respectively. Previous empirical studies (Afenyadu, 2014; Adzawla et al, 2015; Asante, 2016; Darko, 2016) attribute the low coverage of MPS schemes to inaccessibility of the schemes, inadequate pension information and lack of incentives, making them the main barriers limiting informal economy workers’ enrolments in MPS schemes in Kumasi, Accra, Koforidua and Tamale Metropolis These barriers bring into question the hypothesis of the ITS that access, incentives, information, facilitations, expectations, restrictions and securities offered by institutions lead to savings accumulation, and raise the opportunity to interrogate these institutional mechanisms involved in extending MPS coverage to informal economy workers in the Greater Accra Region of Ghana. The last section of the paper comprises the conclusion and related policy implications
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