Extension of Social Security to Informal Economy in Zambia

Abstract

Various scholars and social policy pundits have argued that access to social security is important to reduce the risk of poverty and vulnerability across the life cycle. However, access to social security remains unrealized goal for majority of the global population as only 47 percent of this population had access to at least one social protection benefit in 2021. Regions with higher proportion of people deprived of access to social security are those where majority of the workforce is in the informal economy. Unsurprisingly, this segment is in high numbers in low-and middle-income countries such as Zambia, where the COVID-19 pandemic has further exposed the weak social protection systems. People in the informal economy and low income households experienced more risks and vulnerabilities during the pandemic. About 1.6 billion workers in the informal economy faced turmoil due to COVID-19. The emergence of the pandemic found most nations grappling with ways of extending social security to the informal economy, therby threartening the existing efforts towards improving access to social security. Therefore, the exposure and turmoil faced further justifies the need to extend social security. Literature shows different approaches and experiences on extension of social security to informal economy.

With focus on Zambia, this doctoral project sought to analyze extension of social security to informal economy workers. Zambia has about 76 percent of the working population domiciled in the informal economy. The theoretical framework for this synthesis is the theory of Diffusion of Innovation, Consolidated Framework for Implementation Research (CFIR) and Ecological Systems Theory. The research address the following questions, reflecting the four articles informing this synthesis: 1. What factors influence willingness to pay for health insurance and pension schemes among informal workers in low- and middle-income countries (LMICs)? This question is addressed in Article I and II 2. What is the perception of informal economy workers regarding social security in Zambia? This question is addressed in Article II. 3. How is the condition of institutional capacity in the implementation of social security for informal economy workers in Zambia, and what are the implications for extension of social security? This question is addressed in Article III. 4. What is the perceived risk of contagion of COVID-19 and the pandemic’s effect on domestic workers? Article IV.

Methodologically, the thesis uses qualitative research methods and systematic reviews. Eighty three participants (44 male and 39 female) took part in the study through interviews and focus group discussions. I analyzed qualitative data using thematic analysis. The systematic review include 34 studies from the 1790 papers initially identified. These were synthesized and integrated to the findings of the interviews and focus group discussion to form the basis for propositions of this thesis.

The thesis finds that in low-and middle income countries, and also in Zambia in particular, there are factors that hinder registration for social security as well as those that facilitate registration. Complex registration system, lack of short- term benefits, lack of trust, inadequate human resource, lack of equipment and materials, and lack of local knowledge by policy designers are some of the factors that hinder uptake of social security by informal economy workers (Article II). Conversely, evidence showed that enablers of extension of coverage include knowledge of social security, guaranteed income after retirement, institutional partnerships, low and flexible payment rates, income (high), attractive benefit package-one that includes short term benefits and state subsidies (Article I and II). These factors that enable social security extension are also factors associated with willingness to pay for social security. Additionally, lack of trust in institutions implanting social security may affects uptake of the social innovation informal economy workers. The study further reflects on institutional capacity in extending social security and finds that inadequate human resource, as well as lack of equipment and material has negative implications on extension of coverage while institutional partnerships such as collaboration with informal economy association has potential to foster onboarding of members (Article III).

Within the context of extension of coverage, the study (Article IV) finds that the COVID-19 pandemic affected livelihoods and thereated the ability of domestic workers to contribute towards social security. Domestic workers had a perceived high risk of contracting the COVID-19 pandemic as a result of their work, and environment in which they lived and worked. This category of the workforce faced multiple effects of the pandemic including but not limited to reduced employment opportunities, increased workload, and loss of employment. These effects further led to failure to buy food and adhere to nutritional standards, failure to pay rent for houses, failure to support education of children, ruined access to health care services as well as multifaceted stress burden and increased risk of violence against women.

The proposition of this project is that extension of social security to informal consideration of the contextual factors that hinder onboarding of the members. These factors include the loci of social and economic policy such as provision of quality and affordable education, health care, empowerment schemes, cultural and social factors such as traditional values on asset ownership and the role of women, cultural ways of saving and care for the elderly, and matters relating to institutions responsible for social security such as provision of adequate personnel, relevant equipment, and transparency and accountability. Therefore, the thesis proposes the use of a member-centered approach (Article II) to social security extension. More research on extension of coverage will be needed in order to improve existing initiatives and develop theory. Nested on theory of diffusion of innovation, Consolidated Framework for Implementation Research (CFIR) and the ecological systems theory, the current work has shown the importance of observability, compatibility and relative advantage of the scheme if informal economy workers are to embrace social security as an innovation. It has also shown how occurrence of phenomenon such as pandemics may affect for informal economy workers that already grapple with lack of access to social security.