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Universal Health Coverage and the Challenge of Informal Employment: Lessons from Developing Countries


  • Ricardo Bitran


The aim of the report is to review existing approaches and available policy options to improve access to health care services and financial protection against health shocks for informal-sector workers (ISWs). Along with their families, ISWs represent the majority of the population in many developing countries. The report reviews the definition and measurement of the informal sector and the literature on efforts toward its health insurance coverage. It also examines several country cases based on published and unpublished reports and on structured interviews of expert informants. Developing country efforts to expand health coverage are characterized by a common enrollment and financing pattern, starting with formal-sector workers and following with government-subsidized enrollment of the poor. Thus, ISWs are typically left behind and have been referred to as "the missing middle." They find themselves financially unprotected against health shocks and with limited access to quality and timely health care. ISWs are generally reluctant to enroll in insurance schemes, including social health insurance (SHI), community insurance, and other arrangements. Further, initiatives to enroll them in self-financed contributory schemes have generally resulted in adverse selection, as those with high anticipated health needs are more willing to pay and enroll than others. Successful initiatives to cover this population group are the ones where government has abandoned its expectations to derive relatively substantial revenue from it. Offering this group a benefits package that is relatively smaller than that of formal workers and charging them a premium that is only a fraction of that charged to formal workers is a strategy used by some countries to limit the need for public subsidies. While there is evidence that greater insurance coverage has improved access to health services for ISWs and their dependents, in several countries it has not yet improved financial protection for this target group. A broad set of reforms will be required to strengthen the supply side to ensure that additional public financing translates into improved coverage for ISWs.

Suggested Citation

  • Ricardo Bitran, 2014. "Universal Health Coverage and the Challenge of Informal Employment: Lessons from Developing Countries," Health, Nutrition and Population (HNP) Discussion Paper Series 87077, The World Bank.
  • Handle: RePEc:wbk:hnpdps:87077

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    Cited by:

    1. A. Akhtar & Nadeem Ahmad & Indrani Roy Chowdhury, 2020. "Socio-economic inequality in catastrophic health expenditure among households in India: A decomposition analysis," Indian Economic Review, Springer, vol. 55(2), pages 339-369, December.
    2. Kartika, Dwintha Maya, 2015. "Does Indonesian National Health Insurance serve a potential for improving health equity in favour of workers in informal economy?," MPRA Paper 72054, University Library of Munich, Germany.
    3. Li, Xiaoxue & Tian, Liu, 2020. "The effect of non-employment-based health insurance program on firm's offering of health insurance: Evidence from the social health insurance system in China," Journal of Comparative Economics, Elsevier, vol. 48(4), pages 997-1010.
    4. Susan W. Parker & Joseph Saenz & Rebeca Wong, 2018. "Health Insurance and the Aging: Evidence From the Seguro Popular Program in Mexico," Demography, Springer;Population Association of America (PAA), vol. 55(1), pages 361-386, February.
    5. Maria Anauati & Sebastian Galiani & Federico Weinschelbaum, 2015. "The rise of noncommunicable diseases in Latin America and the Caribbean: challenges for public health policies," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-56, December.
    6. Curtis Huffman & Ricardo Regules-García & Delfino Vargas Chanes, 2019. "Living arrangement dynamics of older adults in Mexico: Latent class analysis in an accelerated longitudinal design," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 41(50), pages 1401-1436.
    7. Alshamsan, Riyadh & Leslie, Hannah & Majeed, Azeem & Kruk, Margaret, 2017. "Financial hardship on the path to Universal Health Coverage in the Gulf States," Health Policy, Elsevier, vol. 121(3), pages 315-320.
    8. Wei Si, 2021. "Public health insurance and the labor market: Evidence from China's Urban Resident Basic Medical Insurance," Health Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 403-431, February.
    9. Paul A. Schulte & Ivo Iavicoli & Luca Fontana & Stavroula Leka & Maureen F. Dollard & Acran Salmen-Navarro & Fernanda J. Salles & Kelly P. K. Olympio & Roberto Lucchini & Marilyn Fingerhut & Francesco, 2022. "Occupational Safety and Health Staging Framework for Decent Work," IJERPH, MDPI, vol. 19(17), pages 1-28, August.

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    absenteeism; access to health care; access to health care services; access to health services; access to services; administrative costs; adverse selection; adverse selection ... See More + problems; Ambulatory care; Capita Health Spending; casual employment; catastrophic expenditures; catastrophic health spending; child health; child health services; Choice of Health Financing System; chronic condition; cities; collection of contributions; Community health; contractual arrangements; costs of health care; delivery system; drugs; elderly people; Employee; Employer contribution; employment effects; Employment Status; enrollees; exposure; families; family income; financial incentives; financial protection; financial risk; financial viability; health care; health care delivery; health care providers; health care reform; HEALTH COVERAGE; Health Expenditure; health expenditures; health facilities; Health Financing; health insurance; health insurance fund; health insurance funds; Health Insurance Plan; health insurance program; Health Insurance Scheme; health insurance schemes; health needs; Health Organization; health policy; health providers; health results; health savings accounts; health sector; health services; health status; health system; health systems; health workers; Health-care; hospitals; household enterprises; household expenditure; household income; Household Survey; Human Development; illness; immigrants; impact evaluations; Income; income countries; income groups; income households; informal economy; INFORMAL EMPLOYMENT; informal sector; informal sector workers; insurance arrangements; insurance contributions; Insurance Plan; integration; jobs; labor force; labor market; Labor relations; Labor supply; Labour; laid-off workers; laws; legal protections; legal requirements; Low income; low-income countries; medical care; medical conditions; medical expenditures; Medical Insurance; medicines; migrants; monthly premium; moral hazard; National Health; National Health Insurance; nongovernmental organizations; Nutrition; outpatient care; outpatient services; patients; payroll tax; pocket payments; preliminary results; previous studies; private employment; private enterprises; private health insurance; private insurance; private insurers; Private providers; private sector; private sector workers; probability; production units; public health; public providers; public sector; public spending; quality of care; risk sharing; safety nets; Servants; social development; social health insurance; Social Security; Social security benefits; total employment; unemployed; unemployment; unemployment insurance; unintended consequence; universal health insurance coverage; unpaid workers; wage gap; worker; workers; working conditions; younger workers;
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