Policy Briefs
Between Costly Formality and Legal Informality: Egypt’s Social Insurance Design Woes
No.
PB 121
Publisher
ERF
Date
November, 2023
In a nutshell
- Social insurance (SI) coverage rates have plummeted across the board in Egypt. In 2021, around a third of total employment (36%) were covered, and only a fifth (20%) of private sector employment.
- Although the current (SI) design includes irregular workers, they are not obligated to participate and are technically excluded from the scheme because the required documentation to enroll is difficult to attain for this group. This renders their informality permissible under existing law.
- The drop in access to social insurance was most pronounced among regular wage workers, who are required to be covered by law. Our analysis shows that such a drop was punctuated by an increasing cost of contributions due to increases in the minimum insurable wage.
- The changes in the real minimum insurable wage every year since 2016 has been a major driver of falling coverage rates among regular wage workers. The scheme became much more expensive for workers in the first and second quintiles, but also the effect is spreading to other quintiles over time.
Research Fellows
Irène Selwaness
Associate Professor, Faculty of Economics and Political...
Research Fellows
Ghada Barsoum
Associate Professor and Chair of the Department...