Lao PDR

Publications

A quantitative study of Lao PDR's labour force and enterprise landscape to understand informality [2022]

Baseline Report of SOLAR Project in Lao PDR's coffee and tea sectors [2023]

Brochure of the National Social Protection Strategy, 2025 [2022]

Pooled Funding Arrangements in Lao PDR [2024]

Simulated Impacts on Growth and Financing of Social Protection [2022]

Social Protection TOT Toolkit [2023]

Understanding informality and expanding social security coverage in the Lao People’s Democratic Republic [2024]

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Situation and Priorities

Social protection situation

The National Social Protection Strategy, adopted in 2020, has the vision that “By 2030, Lao people [will] have access to basic social protection services, consisting of health insurance, social security and social welfare, in an equitable, adequate, effective and sustainable way”. Recent years have seen significant progress in expanding social protection coverage through all three pillars: health insurance, social security and social welfare. Nevertheless, gaps and challenges persist. Only 867,277 people—353,962 insured members and their dependants—beneﬁt from comprehensive social protection coverage through the National Social Security Fund (NSSF). This includes most public sector workers, slightly less than half of all workers in formal enterprises, and 26,793 self-employed workers, especially in the agricultural sector. The majority of the Lao workforce (86.4 per cent) is in informal employment and lacks basic social protection coverage. There are no national social welfare programmes in place for the most vulnerable segments of the population, while donor-supported programmes provide cash benefits and services to a limited number of people. Lao PDR is committed to developing and strengthening the national social protection system guided by the National Social Protection Strategy.

There has been notable extension of social health insurance coverage in recent years. According to the Ministry of Health, effective coverage increased from 11 per cent in 2008 to 94.5 per cent currently. This was achieved by adopting a mix of funding mechanisms combining social contributions with tax-based ﬁnancing and direct co-payments. Despite this progress, the financial sustainability of the National Health Insurance (NHI) is at high risk, weakened by irregular, insufficient and unpredictable Government resources allocations and increasing costs of care. Consequently, while coverage has expanded, social health protection coverage has worsened over the past years, with a doubling of the proportion of households suffering catastrophic health spendings (3.0 per cent in 2007 to 6.7 per cent in 2019). More government investment is necessary to reduce out-of-pocket expenditures (estimated at 31 per cent in 2024) and to enhance the management and administration of the NHI.

COVID-19 and other crises

In response to the COVID-19 pandemic, the Government of Lao PDR enacted swift and stringent lockdowns, considerably limiting the number of cases and ensuring that the healthcare system was not overburdened. The eﬀects were mainly economic and social, with over 500,000 people estimated to have lost their livelihoods. The UNDP estimated that 383,000 people may have fallen into poverty. Food security and education were disrupted, while cases of gender-based violence increased, leaving Lao PDR at high risk of losing development gains made over the last decade.

Social protection responses to COVID-19 included deferring social security contributions of aﬀected businesses and paying unemployment beneﬁts from the National Social Security Fund (NSSF). The Government of Lao PDR, with support from many development partners and donors, implemented cash transfer pilots and livelihood generation programmes.

In 2022, the country faced a new economic crisis, partly due to rising debt obligations and the fallout from the COVID-19 pandemic and the Ukraine crisis which impacted the import-dependent country. According to the Lao Statistics Bureau, inflation averaged 31.2 per cent in 2023. With the reopening of borders, many rural and urban workers began migrating to neighbouring countries for work. Although employment rose in 2022 and some sectors like tourism saw growth, earnings did not keep pace with inﬂation. High inﬂation and increased costs of living, particularly of food and fuel, greatly aﬀected the poor and vulnerable, with some families forced to reduce their consumption of nutritious food and others withdrawing children from school.

Visit the Social Protection COVID-19 Monitor

Government and social partner priorities

The National Social Protection Strategy states its vision as “By 2030, Lao people have access to basic social protection services, consisting of health insurance, social security and social welfare, in an equitable, adequate, eﬀective, and sustainable way.” It is guided by the principles of equity, adequacy, eﬀectiveness, universality, non-discrimination, progressivity, and sustainability. The Strategy outlines three clear goals: to further develop and strengthen the health insurance system, social security system, and social welfare system.

The government and social partners prioritise the expansion of social security and social welfare coverage to more Lao people. These priorities are part of their respective organizational work plans. A key priority is to amend the Law on Social Security in 2024-25 to improve the design, governance, and operations of the scheme through a consultative tripartite social dialogue process. The Lao Social Security Organization works closely with the Lao Federation of Trade Unions (LFTU) and civil society organizations representing informal workers as well as the Lao National Chamber of Commerce and Industry (LNCCI) and sectoral associations, supported by the ILO and other development partners, to improve the social security system and expand coverage.

A clear government priority is to continue to expand health protection coverage. The domestic resources for social health insurance are not sufficient to guarantee its sustainability, particularly in view of the current ﬁscal situation. The ILO, in collaboration with other development partners, is supporting the government in considering policy options to improve sustainability and healthcare services. In this context, the ongoing revision of the Law on Health Insurance and the Law on Social Security aims to address the fundamental issue of financing social health protection and guaranteeing financial protection in Lao PDR, without reversing the progress on population coverage achieved so far. In addition, strengthening operational capacities to administer the scheme is at the core of the government’s priorities.

ILO Projects and Programmes

Extending Social Protection Coverage to Workers in the Informal Economy in Lao PDR and Kenya and Leveraging Digital Transformation: through South-South Cooperation
13.12.2023 - 31.12.2026 USD 999,990 China
Building Social Protection Floors for All - Phase II
13.12.2021 - 31.12.2025 USD 10,080,244 Belgium , Multi Donor , Luxembourg , Germany

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Results

In 2022-23, the ILO provided technical and financial support for the amendment of the Health Insurance and Social Security Laws:
- Comprehensive consultative processes leading to the development of draft Health Insurance and Social Security Laws, expected to be enacted in 2024.
- Evidence was produced to inform policy options, including an actuarial analysis, technical and legal review notes, policy briefs, and research on informality.
In 2022-23, following the adoption of the Decree on social security inspections, the ILO supported the review of Social Security Inspection Guidelines and the development of Standard Operating Procedures.
In 2023, the first mobile social security office in Lao PDR was piloted with ILO support. It is expected to be expanded and implemented in more provinces in 2024.
In 2023, 713 officials (293 women) from the government, social partners and civil society were trained on various social protection topics, including a Training of Trainers programme which created a cadet of 28 master trainers.
In 2022, NHI claim and verification guidelines were revised, and trainings were conducted in seven provinces.
In 2019, the ILO provided technical support for the development of the first National Social Protection Strategy and its implementation plan.
In 2018-19, ILO supported the merging of social health protection schemes into the design and rollout of an integrated NHI scheme.
In 2018, the revision of the national Social Security Law was enacted by the government, benefiting from the results of the ILO's actuarial analysis of the National Social Security Fund.