Abstract
State legitimacy and effectiveness can be observed in the state’s approach to delivering welfare to citizens, thus mitigating social grievances and avoiding conflicts. Social security systems in the Maghreb countries are relatively similar in their architecture and aim to provide social insurance to all the workers in the labor market. However, they suffer from the same main problem: a low rate of enrollment of workers. Many workers (employees and self-employed) work informally without any social security coverage. The issue of whether informal jobs are chosen voluntarily by workers or as a strategy of last resort is controversial. Many authors recognize that the informal sector is heterogeneous and assume that it is made up of (1) workers who voluntarily choose it, and (2) others who are pushed into it because of entry barriers to the formal sector. The former assumption tells us much about state legitimacy/attractiveness, and the latter is used to inform state effectiveness in delivering welfare. Using the Sahwa survey and discrete choice models, this article confirms the heterogeneity of the informal labor market in three Maghreb countries: Algeria, Morocco, and Tunisia. Furthermore, this article highlights the profiles of workers who voluntarily choose informality, an aspect that is missing from previous studies. Finally, this article proposes policy recommendations in order to extend social security to informal workers and to include them in the formal labor market.
Highlights
In his seminal contribution to understanding the mechanisms of employment informality in developing countries, Maloney (2004) highlights the cost of social protection for impoverished workers
Alternative explanations include that given by Lopez (1970), who postulates that individuals will choose an informal job if they do not have access to a formal one, and that of Fields (1990), who shows that informal employment can be chosen for its easy access and flexibility of work
As isiswell from employment surveys in the societies, the Sahwa survey confirms the low rate of participation in the social security system
Summary
In his seminal contribution to understanding the mechanisms of employment informality in developing countries, Maloney (2004) highlights the cost of social protection for impoverished workers. Given the low quality of services in many developing countries, mandatory contributions can be disadvantageous. Shehu and Nilsson (2014) highlight the socio-demographic determinants of informality, showing the impact of certain variables on the probability of being enrolled in social security systems. We tackle the issue of low social security enrollment in three Arab countries (Algeria, Morocco, and Tunisia), and try, for the first time in the studied countries, to link it to issues of state fragility/strength and grievance. State fragility/strength is defined as the state’s ability to offer effective and legitimate governance in the social, economic, political, and security realm (Marshall and Elzinga-Marshall 2017)
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