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Social Security Coverage and the Labor Market in Developing Countries

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Author Info

  • Paula Auerbach
  • María Eugenia Genoni
  • Carmen Pagés-Serra
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    Abstract

    This paper analyzes the reasons behind the low rates of contribution to social security programs in developing countries. Using a large set of harmonized household surveys from Latin America we compare contribution patterns among wage employees, for whom participation is compulsory, with contribution patterns among self-employed workers, for whom participation is often voluntary. In all countries, contribution rates among salaried workers are similarly correlated with education, earnings, size of the employer, household characteristics and age. In addition, contribution patterns among salaried workers are highly correlated with contribution patterns among the self-employed. Our results indicate that on average more than 30 percent of the explained within-country variance in contributions patterns may be accounted for by individuals low willingness to participate in old-age pension programs. Nonetheless, we also find evidence suggesting that some workers are rationed out of social security against their will.

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    File URL: http://www.iadb.org/document.cfm?pubDetail=1&id=773140
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    Bibliographic Info

    Paper provided by Inter-American Development Bank in its series IDB Publications with number 4130.

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    Date of creation: Sep 2005
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    Handle: RePEc:idb:brikps:4130

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    Related research

    Keywords: Social Security; Poverty; Social Security; Social Security Coverage; Labor Market; Pension; Informality; Self-employment;

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    Cited by:
    1. María Claudia LLANES VALENZUELA & Gabriel Armando PIRAQUIVE G., 2012. "Sistemas pensionales y solidarios de Chile, Irlanda,Polonia, Brasil y Perú," ARCHIVOS DE ECONOMÍA 009596, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    2. Marisa Bucheli & Rodrigo Ceni, 2007. "Informality: Sectoral Selection and Earnings in Uruguay," Documentos de Trabajo (working papers) 2007, Department of Economics - dECON.

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