Reimagining social protection: New systems that do not rely on standard employment contracts are needed by Michal Rutkowski published by Finance & Development (12/2018).
“The changing nature of work is upending traditional employment and its benefits. In developed economies, global drivers of disruption—technological advances, economic integration, demographic shifts, social and climate change—are challenging the effectiveness of industrial-era social insurance policies tied to stable employment contracts. Those policies have delivered formidable progress, but they have also increasingly harmed labor market decisions and formal employment.
Such systems in rich countries were developed at a time of widespread “jobs for life,” with social insurance based on mandatory contributions and payroll taxes on formal wage employment. This traditional, payroll-based insurance system is increasingly challenged by working arrangements outside standard employment contracts.
In developing economies, the world of work has mostly been diverse and fluid. Hence, the uniformity and stability of work that underpins traditional social insurance systems may not hold. In fact, social insurance participation and coverage have remained low. In Bangladesh, India, Indonesia, Nigeria, and Pakistan, which account for about a third of the world’s population, the number of people covered hovers around a single digit, with virtually no change in decades (see Chart 1)…”
