Effective coverage of social security schemes for domestic workers

 

Social security systems in developing and emerging countries face the greatest challenges in extending social coverage to domestic workers, both in terms of the recognition of the right in national law as well as in the effective enrolment in programmes (effective coverage). Although legal social security coverage of domestic workers is 100 per cent in many countries, in practice, only a fraction of domestic workers pay contributions to social security systems.

The factors that determine effective coverage rates of domestic workers are quite varied and complex. They may interact and have diverse effects, depending on the level of development of the social protection system in each country, as well as on institutional and cultural considerations, among others.

The factors that determine effective social security coverage for domestic workers are listed below. It is important to point to the lack of scientific studies on the relative importance of the different factors.

1. The mandatory or voluntary nature of legal coverage;
2. The contributory capacity of employers and workers;
3. The scope of the legal and institutional framework associated with the capacity to exercise contributory control, mandatory compliance and inspections;
4. Workers’ capacity to negotiate with employers (which is associated with legal and administrative support, the degree of familiarity with rights and access to effective complaint mechanisms, among others);
5. Ease in practice of social security registration procedures;
6. Ease of making social security contributions;
7. Intensity of the use of information technologies (to bring services closer to the population and to simplify them);
8. Vertical coverage (contingencies covered and level of benefits);
9.  Perception of the quality of services and benefits provided by social security institutions;
10. The level of organization and association of domestic workers, which influences their ability to make and obtain demands;
11. The level of social awareness (civic culture) regarding the importance of social security; and
12. Differences in the treatment of migrant workers. It is widely recognized that good institutional governance plays a key role in achieving high levels of social protection for difficult-to-cover groups. This is a relevant issue discussed throughout this report.

Estimated rates of effective coverage

It is widely recognized that good institutional governance plays a key role in achieving high levels of social protection for difficult-to-cover groups. This is a relevant issue discussed throughout this report. Figure 8 provides information on the rate of effective coverage for 19 developed and developing countries in five regions, and their relationship to the countries’ income levels. Although access to effective coverage data is quite limited, available information points to some trends and regularities.

Estimates of the effective rate of social security coverage for domestic work, by level of per capita GDP, for selected countries (latest year available)

Source: Department of Social Protection ILO, database domestic workers.

Figure demonstrates the clear positive relationship between the effective coverage rate, in other words, the percentage of domestic workers who are actually registered as social security contributors, and the GDP per capita. However, in countries with GDP per capita below US$ 10,000, that relationship was not sufficiently clear, which supports the idea of the existence of widely diverse determinants.

Figure shows a high dispersion in coverage levels among countries with GDP per capita ranging from US$ 15,000 to US$ 20,000, with rates from 10 per cent to 40 per cent. The differences in coverage levels among countries of similar income reflect the diverse levels of development of social security systems, which ultimately determines the capacity to apply strategies designed to increase coverage. Mexico and El Salvador are the only countries in this study that have voluntary insurance to protection schemes, as well as the ones with lowest effective coverage rates. However, El Salvador launched its voluntary protection scheme beginning in 2010 through the Special Health and Maternity Scheme for Domestic Workers.

Another conclusion that can be drawn from this figure is that even though statistical representation is limited, developed countries with similar levels of GDP per capita, such as Italy and Spain, not only have a limited effective coverage rate, considerably below 100 per cent, but also exhibit significant differences in coverage: 42 per cent in Italy (similar to developing countries such as Ecuador, Uruguay and Chile) versus 68.5 per cent in Spain. Interestingly, Spain has a high percentage of domestic workers from Latin America while the migratory influx to Italy originates mainly from Mediterranean countries.