Covering the informal economy to achieve universal social protection

Exploring a fairer and more inclusive social protection paradigm for the world’s informal workers

This brief was prepared by André F. Bongestabs and Suravi Bhandary based on the technical note produced by Pierre Plamondon, Senior Actuary, with the support of ILO’s Actuarial Services Unit, as part of the technical support provided by the ILO to the Social Security Fund of Nepal. The brief discusses various considerations that needs to be placed during the design and implementation of contribution-based social security for workers in the informal economy and self-employment.

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The majority of the global workforce – 61% – is informal and has been disproportionately impacted by measures to prevent the spread of COVID-19 and by the accompanying economic downturn. The focus on aggregate job and livelihood losses masks the multiple drivers behind these losses that are leaving labour markets in general, but particularly in developing countries, without a viable path to recovery. The global informal workforce is diverse, and understanding experiences of workers in different contexts and sectors is required to design effective recovery policies.

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World Bank’s Push for Individual Savings Provides Little Protection for Crisis-hit Workers

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Join IMF Managing Director Kristalina Georgieva and ILO Director General Guy Ryder for a virtual conversation about recent developments in the informal economy on Friday, July 23 at 09:00 a.m. (ET). More than 60 percent of the world’s adult labor force, or about 2 billion workers, operate in the informal economy.

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Informal employment, defined through the lack of employment-based social protection, constitutes the bulk of employment in developing countries, and entails a level of vulnerability to poverty and other risks that are borne by all who are dependent on informal work income. Results from the Key Indicators of Informality based on Individuals and their Households database (KIIbIH) show that a disproportionately large number of middle‑class informal economy workers receive remittances.

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