Extending social security to workers in the informal economy
This ILO policy resource package “Extending social security to workers in the informal economy: Lessons from international experience” serves as a reference for policy makers, workers’ and employers’ organizations and other stakeholders engaged in the development of social protection strategies, or the planning, design, implementation and monitoring of systems and schemes. This practical tool can help in developing viable policy options to address the multi-fold challenges of extending social protection to workers in the informal economy and facilitating transitions to formality. It includes the following elements:
- Good practices guidebook (available in English, Portuguese and Russian)
- Issue briefs on lessons learnt for specific categories of workers and topics
- Training materials
This policy resource package is intended to be a living toolkit. It will benefit from your feedback and inputs, especially from specific examples, experiences and resources that can be helpful for others. We welcome your suggestions - please get in touch.
Contacts: Christina Behrendt (firstname.lastname@example.org) and Alix Machiels (email@example.com)
For most workers in the informal economy, the lack of social protection is not only a challenge in their daily struggles to make ends meet, but it also holds them back in their aspirations for decent work, rights and dignity. For the societies in which they live, the lack of social protection coverage undermines inclusive growth, weakens social justice and undermines the realization of human rights.
The term “informal economy” refers to all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements (ILO Transition from the Informal to the Formal Economy Recommendation, 2015 (No. 204), para 2).
The COVID-19 crisis and its socio-economic impacts have exposed the vulnerabilities of workers in the informal economy who lack adequate social protection coverage. In the absence of income security and effective access to health care, many workers in the informal economy face existential struggles to make a living and feed their families. At the same time, they are among those worst hit by the lockdown measures taken to contain the virus and many of them work in the hardest-hit sectors. Many workers and economic units in the informal economy have lost most or all of their income and many workers in the informal economy, particularly those working in public spaces and domestic workers, face higher health risks.
The COVID-19 crisis has also highlighted the urgency and importance of ensuring that workers in all forms of employment have adequate social protection coverage, which should be adapted to their circumstances and in line with international labour standards. This was reflected in the Resolution concerning the second recurrent discussion on social protection, adopted by the International Labour Conference in June 2021, in which governments, workers and employers of the ILO’s 187 member States committed to working towards achieving universal access to comprehensive, adequate and sustainable social protection, including nationally defined social protection floors. Although many governments have taken emergency measures by extending existing or establishing new social protection schemes and programmes, most crisis-related measures have been short-term in nature and in many cases not sufficient to meet the urgent needs of workers in the informal economy. As the crisis passes, such temporary measures should be transformed into sustainable mechanisms to close social protection gaps, guaranteeing the effective protection of workers in all types of employment. This will not only advance progress towards universal coverage but also ensure that all parties contribute their fair share to the social security system. It will also help countries to be better equipped to deal with future crises and to promote a human-centred future of work.
The 2030 Sustainable Development Agenda commits to nationally appropriate social protection systems and measures for all, including floors, and sets a clear target to achieve by 2030 substantial coverage of the poor and vulnerable (SDG target 1.3). In addition to SDG 1 on eradicating poverty, social protection also contributes to SDG goal 2 on eradicating hunger, SDG goal 3 on good health and well-being, SDG 5 on gender equality, SDG 8 on decent work and economic growth, SDG 10 on reduced inequalities and SDG 16 on peace, justice and strong institutions.
Moreover, extending protection to so far uncovered workers is also one of the recommendations of the Global Commission for the Future of Work (2019) as part of a human-centred approach to the future of work. Some countries have made impressive progress in covering larger groups of workers and the wider population. These experiences, together with a number of recent research, offer a growing knowledge base that can provide useful lessons learnt and inspiration for other countries. Moreover, the international normative framework has been enriched by the recent adoption of two important new international labour standards, the ILO Social Protection Floors Recommendation, 2012 (No. 202), and the ILO Transition from the Informal to the Formal Economy Recommendation, 2015 (No. 204).