Social Security Coverage and the Labor Market in Developing Countries

This paper analyzes the reasons behind the low rates of contribution to social security programs in developing countries. Using a large set of harmonized household surveys from Latin America we compare contribution patterns among wage employees, for whom participation is compulsory, with contribution patterns among self-employed workers, for whom participation is often voluntary. In all countries, contribution rates among salaried workers are similarly correlated with education, earnings, size of the employer, household characteristics and age. In addition, contribution patterns among salaried workers are highly correlated with contribution patterns among the self-employed. Our results indicate that on average more than 30 percent of the explained within-country variance in contributions patterns may be accounted for by individuals’ low willingness to participate in old-age pension programs. Nonetheless, we also find evidence suggesting that some workers are rationed out of social security against their will.

Social Security Coverage and the Labor Market in Developing Countries

This paper analyzes the reasons behind the low rates of contribution to social security programs in developing countries. Using a large set of harmonized household surveys from Latin America we compare contribution patterns among wage employees, for whom participation is compulsory, with contribution patterns among self-employed workers, for whom participation is often voluntary. In all countries, contribution rates among salaried workers are similarly correlated with education, earnings, size of the employer, household characteristics and age. In addition, contribution patterns among salaried workers are highly correlated with contribution patterns among the self-employed. Our results indicate that on average more than 30 percent of the explained within-country variance in contributions patterns may be accounted for by individuals low willingness to participate in old-age pension programs. Nonetheless, we also find evidence suggesting that some workers are rationed out of social security against their will

Inclusão social e desenvolvimento econômico na América Latina

América Latina e o Caribe são uma das regiões com maior diversidade étnica, racial e cultural do mundo. Essa diversidade representa um ativo importante e constitui um elemento-chave para alcançar uma estabilidade econômica e política duradoura e para construir uma sociedade justa, coesa e democrática. A região deve, porém, superar uma longa e conflitante história de práticas de exclusão que levou a sociedades divididas e desiguais, impedindo a concretização da riqueza representada pela diversidade. Esta coleção de artigos é resultado de um esforço do Banco Interamericano de Desenvolvimento para contribuir para o desenvolvimento de uma região que valoriza suas culturas indígenas, reconhece suas diferentes raízes étnicas, promove o papel de liderança da mulher e dá voz às pessoas portadoras de deficiências e com HIV/aids. Faz parte de uma iniciativa do Banco de apoiar os países da região na construção de sociedades socialmente mais inclusivas e mais coesas. A região deve enfrentar os desafios desse ideal, o qual não apenas representa uma promessa de crescimento e desenvolvimento, mas também um imperativo ético irrefutável.