Book Review: Social Insurance, Informality and Labor Markets. How to Protect Workers While Creating Good Jobs
| DOI | 10.1177/138826271501700307 |
| Date | 01 September 2015 |
| Published date | 01 September 2015 |
| Subject Matter | Book Review |
Book Reviews
European Jour nal of Social Sec urity, Volume 17 (2015), No. 3 401
Markus Frölich, David K aplan, Carmen Pagés, Jamele Ri golini and David Robalino
(eds .), Social In surance, Informality and L abor Markets. How to Protec t Workers
while Creating Good Jobs, Oxford University Press, 2014, 544 pp., Oxford: Oxford
University Press, ISBN 978–0 -19–968523–3, 524 (hardcover)
In this book, Frölich et al. have assembled the papers presented at a conference
sponsored by the World Bank, the Institute for the St udy of Labor (IZA) and the Inter-
American Development Bank, wh ich took place in Mexico in 2011. e 15 chapters
examine the relat ionship between the legal provisions relating to socia l insurance and
the (in)formality of jobs. ese papers comprise a sig ni cant volume of comparative
studies, based on the legal provisions in Latin A merica, Malaysia, a nd the Middle
and Eastern Europea n countries that joined the European Union in 2004. e social
security provisions i n these countries are largely based on t he Bismarckian model and
their labour markets a re characterised by a high level of informal work.
1. THE STRUCTURE OF THE BOOK
e papers are grouped into three sec tions dealing with the e ec ts of soci al insu rance
on labour markets (I), options for (re)designing redistributive patterns in social
insurance system s (II) and nancing structures (III). ese is sues are illustrated with
examples from unemployment bene t schemes, health insurance and pensions. e
starting point of all the ar ticles is the assumption that Bismarckian systems provide
far from universal coverage and contain negative incentives for labour market
participation, e.g. due to the possibility of claim ing early pensions, generous rules
relating to unemployment bene ts, or hindering job change bec ause of the lack of
portability of bene ts. Another impor tant shortfal l is seen in the ta x wedge, which
represents the gap between the cost of employment for employers and the ta ke home
pay for employees, and partly explai ns the dri from formal to informal work.
1.1. EFFECTS OF SOCIAL I NSURANCE ON LA BOUR MARK ETS
e di erent chapters approach reasons and solutions for these problems from
di erent points of view. Chapter 2 outlines the historical development of social
protection in Latin America. e i ntroduction of the Bismarck ian model was
motivated by insu cient tax revenue to na nce a Beveridge-type s ystem rather
than by a preference for employee-related social coverage. Social protection in Latin
America is highly fragmented, mainly covering formally employed persons. ese
gaps lead to the conclusion that a ‘complete redesign’ is unavoidable in order to foster
formal employment in good jobs and achieve bet ter coverage of the population.
Possible ways of meeting these ends a re elaborated in the following chapters.
Chapter 3 nds that the wi llingness to engage in formal work increases w ith the
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