• BLOG SURF
JANUARY 04
Providing pensions and other forms of social insurance to people requires keeping track of large numbers of individuals over long periods of time. There is little margin for error.
Allocating contributions of one individual to the pension of another not only affects individual fates. It also risks undermining the trust in the entire system and without trust social insurance cannot work.
In the formal economy with contractual employer-employee relationships, the identification of an individual over a long period can (at least partially) be outsourced to the employer.
After all, an employer should be able to confirm her employee's identity. Informal sector workers, who work in 89.2% of all jobs in Sub-Saharan Africa, however, cannot rely on their employers to take on this role.
They tend to lack defined employment relationships, frequently change employer, are self-employed, or tend to be highly mobile.
Extending social insurance to the informal sector therefore critically depends on the social insurance system's ability to identify individuals without relying on an employer to do so. - blog.wb.org/blogs
A version of this article appears in the print on January 5, 2022, of The Himalayan Times.
