Abstract
In this article, Nicola Smit and Letlhokwa George Mpedi critically evaluate the appropriateness of social protection, particularly social insurance, for informal economy workers. It addresses the question from a developing country perspective, focusing in particular on Southern Africa. The authors start by analysing concepts (such as “informal economy”, “employee”, “social protection” and “social security”) pertinent to the theme of making social insurance appropriate for informal economy workers. They then provide an overview of the labour market and social protection challenges, followed by recommendations on how to make social insurance more relevant to those toiling in the informal economy. On the one hand the authors consider ways to extend social protection to informal economy workers and their families and, on the other hand, investigate to what extent it is possible to strengthen the linkages between the informal and formal economies. They emphasise that the labour law concept of “employee”, which serves as a gateway to social insurance, has to be interpreted more widely. Secondly, social insurance schemes have to be adapted so as to make them amenable to partial or voluntary participation of the informal economy workers. Thirdly, options for making social insurance benefits suitable for those working in the informal economy should be further investigated. Fourthly, the administrative capacity of social insurance schemes should be improved. Furthermore, the informal coping strategies of people should be reinforced and, where possible, formalised. Most importantly, trade union involvement in and solidarity with those eking out a living in the informal economy should be encouraged.
Highlights
1 INTRODUCTION In Southern Africa1 workers in the informal economy and their dependants are for the most part completely excluded from social protection schemes, in particular social insurance schemes
According to Van Ginneken, about one-third of people in the world are not covered by any formal social security protection,6 which suggests that the above framework can no longer suffice
Social insurance measures should be made more appropriate to the informal economy workers so as to enable those who can protect themselves against social security risks to do so while they can
Summary
In Southern Africa workers in the informal economy and their dependants are for the most part completely excluded from (formal) social protection schemes, in particular social insurance schemes. This is due to the fact that most social insurance schemes link the concept of contributor to that of employee. This is problematic, since the notion “employee” is by and large used to refer only to “standard” formal sector workers. Occupational and. The main reason for the exclusion of workers in the informal economy from statutory social security coverage has been described by Van Ginneken as the fact that these workers “are unable or unwilling to contribute a relatively high percentage of their incomes to financing social security benefits that do not meet their priority needs”.7 This naturally leads to the need for researchers to determine the priority needs of workers in the informal economy and explore ways of extending social protection to such workers. In our poverty-stricken region policies and strategies should take account of both the formal and informal economies They should steer clear of the conception that social assistance is (or should be) the panacea of the social protection coverage challenges of informal economy workers in developing countries.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
