How can social protection in developing countries empower people to create employment-related ways out of poverty? This paper examines empowerment in the context of social protection for informal workers. It argues that social protection can help to improve the health and well-being of informal sector workers, especially poorer women, and build their capacity to organise and demand better working conditions. Interventions must consider the sector’s diversity, its permanence, and the limited choices that drive people to work in it.
Efforts aimed at expanding social protection coverage in developing countries must take account of the diversity of the informal sector, as well as two key concepts: choice and permanence. Firstly, most people, especially women, work informally because their limited choices give them no alternative. Secondly, informal economic activity has become a permanent feature of economic life in both developed and developing countries, and should be viewed as part of mainstream economic activity.
Core elements of a conceptual framework for social protection in the informal economy include the following:
- Helping poor people, especially women, to know and assert their rights
- Addressing risks at different stages of the employment life cycle
- Exploring the incorporation of social protection for informal workers in existing labour, financial and insurance institutions, as well as supporting the establishment of specific institutions where necessary
- Promoting a comprehensive, multi-stakeholder approach by focusing on local, national and international spheres and involving government, informal and formal workers, the private sector and employers.
Social protection programmes for informal workers face a number of challenges, including high start-up costs, a lack of sustainability due to their small scale and a lack of ownership. However, some member-based organisations of informal workers have been successful in linking empowerment, social protection and poverty reduction. Examples of good practice include the following:
- The comprehensive health programme of the Self-Employed Women’s Association in India focuses on the links between health, employment and income security. Its activities include research and prevention, health promotion and care, and an insurance scheme.
- Organisations of street vendors have forged stronger links to promote the rights of informal workers.
- A number of networks have focused on social protection for home-workers (industrial outworkers), through research and advocacy for example.
Donors should support the provision of social protection for poorer informal workers – especially women – as a means of tackling poverty and building the productive capacities of present and future generations. It is important to:
- Review economic and social policies to ensure they do not marginalise poorer informal workers, especially women.
- Raise awareness among employers of the productivity-lowering effects of poor employment practices. The responsibility of employers/owners of capital for social protection should also receive greater attention.
- Explore the possibility of mainstreaming social protection for informal workers, whilst also continuing to support the capacity of institutions for informal workers where necessary.
- Promote a multi-stakeholder approach by fostering alliances among workers’ organisations (both formal and informal) and promoting dialogue with employers’ organisations. The long-term improvement of the income and working conditions of informal workers requires stronger advocacy organisations.
- Refine existing poverty analysis tools to consider workers in the informal economy.
