Abstract
The paper examines the socio-economic dynamics and challenges to the social insurance scheme in Oman, during the period 2002-2016, using secondary sources. The study adopts a confirmatory factor analysis (CFA), and develops a model to identify the determinants of social insurance coverage for active insured and elderly beneficiaries. The study finds evidence that social insurance coverage in Oman is low, amounting to 12.1 and 6.6% for the active insured and the elderly beneficiaries respectively. Results also show that the common economic factors that have an influence on social coverage for both groups include per capita GDP, the fixed capital formation and inflation, while globalization has an influence on the active insured only., Omanization is a common, non-economic factor for both groups, in addition to fertility rate for the active insured, and life expectancy for elderly beneficiaries. Economic factors were found to be more important than non-economic factors for social insurance coverage in Oman.
Highlights
With the wide range of personal health and economic risks in todays’ modern life, the social insurance industry plays an important role in economic growth and overall health and wellbeing of nations (Arena, 2008; Cummins et al, 2016, Din et al, 2017; Muye and Hassan, 2016, Sajid et al, 2017)
The coverage rate for the elderly beneficiaries ranges between 0.48% and 10.98%, with the average amounting to 6.57%, and standard deviation of 2.92%
That the output of higher educational needs to be strengthened, and the attitude of graduates changed, to increase their willingness to be employed in the private sector. Another reason for the low social insurance coverage is the generosity of the public pension schemes that offer benefits well above international benchmarks and allows for
Summary
With the wide range of personal health and economic risks in todays’ modern life, the social insurance industry plays an important role in economic growth and overall health and wellbeing of nations (Arena, 2008; Cummins et al, 2016, Din et al, 2017; Muye and Hassan, 2016, Sajid et al, 2017). Through its different products, including life insurance, annuities, disability income insurance and long-term care insurance, the social insurance industry functions as a unique provider of personal financial protection, and a contributor to long-term economic growth, by supporting both consumer spending and capital markets (Impavido et al, 2003; Kugler and Ofoghi (2005). In Gulf Arab countries, where traditional values and institutions coexist with modern values and institutions, the range of social protection includes an even wider range of benefits and beneficiaries, presenting even more challenges to social insurance schemes (Soper, 2015). Efforts have been further strengthened by the establishment of the Public Authority for Social Insurance (PASI) in 1992, as an important step towards raising the level of welfare and social protection of Omani citizens
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