Rights-based Approach to Social Security Coverage Expansion

Organization(s): World Bank
Author: Krzysztof Hagemejer
Regions: World
Year: 2009
Language: English

This chapter presents the vision, originating from International Labour Organization (ILO) conventions and recommendations, of the universalization of affordable retirement as part of a wider objective of guaranteeing a basic social security package to all.

Both the principles that sustain the vision and issues related to design and implementation are outlined, as are the minimum requirements, derived from international labor standards, that are applicable to social security and, in particular, to pensions. To meet these requirements—that is, to provide at least minimum income security in old age to all—it will be necessary to go beyond purely earnings- related contributory pensions and to introduce various noncontributory interventions, within and outside contributory schemes. Adequacy and cost concerns have to be balanced carefully to arrive at affordable and viable pension polices. The analysis shows that the magnitude of the existing coverage gap is closely linked to labor market patterns, which are shaped in many countries by prevailing self- employment, with noncash and nonregular incomes, and by informality. To close the gap, greater reliance has to be placed on noncontributory provisions because contributory systems cannot effectively cover many of those groups, or those individuals with shorter, broken careers and low lifetime incomes. A noncontributory basic pension—combined, if applicable, with noncontributory interventions within social insurance schemes—is a possible strategy for filling the gap and gradually realizing income security in old age for all people everywhere.

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