The informal sector and social protection

In recent years, there has been growing interest to extend social protection coverage to people working in the informal economy. Informal economy workers constitute substantial workforce in most countries and form a base for most economies. However, they are largely excluded from formal social protection coverage. Reasons for exclusion include inadequate legal coverage, lack of compliance and adequate monitoring mechanisms, lack of knowledge about social protection, high contribution rates, unattractive benefit package and mistrust. There are a range of policy options and modes of delivery that can be used to extend coverage. Coverage for informal economy workers in social protection is important. Contributions, benefit package and vesting period should all be tailored to attract people in the informal economy, according to each country setting, in order to protect people from social and economic risks.publishedVersionPeer reviewe

Case study M : Extension of the contributory pension scheme to small-scale farmers in Zambia

Zambia embarked on an ambitious plan to extend pension schemes to informal economy workers, including small scale farmers, who are traditionally excluded from pension schemes. The extension of coverage is aided by enactment of statutory instrument that enables design of a scheme with peculiar financing such as reduced contribution rates, and benefit package including short-term benefits such as maternity benefits, family funeral grant, and access to credit. Administratively a mixed approach of public-private model has been embraced through partnerships between the National Pension Scheme Authority (NAPSA) and informal economy worker associations, and the private sector. This chapter presents considerations for the implementation of pension schemes to small scale farmers.publishedVersionPeer reviewe