1887

OECD Development Centre Working Papers

The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.

English, French

Financing the extension of social insurance to informal economy workers

The role of remittances

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. Such results confirm that risk management strategies, such as migration, play a part in minimising the potential risks of informal work for middle‑class informal households who may not be eligible to social assistance. They further suggest that middle‑class informal workers may have a solvent demand for social insurance so that, if informality-robust social insurance schemes were made available to them, remittances could potentially be channelled to finance the extension of social insurance to the informal economy.

English Also available in: French

Keywords: migrant workers, risk-pooling, poverty, remittances, informal workers, middle class workers, social insurance, migration, social protection, savings, development
JEL: E26: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Informal Economy; Underground Economy; H55: Public Economics / National Government Expenditures and Related Policies / Social Security and Public Pensions; F24: International Economics / International Factor Movements and International Business / Remittances; I38: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Welfare, Well-Being, and Poverty: Government Policy; Provision and Effects of Welfare Programs; G52: Financial Economics / Household Finance / Household Finance: Insurance; F22: International Economics / International Factor Movements and International Business / International Migration
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