Economic Research Forum (ERF)

Social security for young workers in Arab countries

Social security coverage of young workers in Arab countries is low – in part because many are employed in informal jobs; and in part because they do not see the value of the system. This column reports survey evidence on young workers’ attitudes towards participation in both social security and politics. It also explores policy reforms that might make access to social security universal for young workers.

In a nutshell

More than half of young informal workers are not interested in current social security systems, according to surveys in Algeria, Egypt, Lebanon, Morocco and Tunisia.

Young people are more interested in immediate benefits rather than pensions: social security systems could attract youth participation by offering some immediate payments, such as transport and housing benefits.

Disseminating knowledge about social insurance using social media could have a positive impact on youth awareness of the value of social security – and thus increase their participation.

International institutions such as the International Labour Organization and the World Bank argue that social security is a human right. Yet despite mandatory participation of workers in social security systems in most Arab countries, more than half of workers work informally and without social security coverage (Keyrouz, 2016).

Many studies recognise that young workers are less likely to be entitled to social security and covered against social risks. This makes them more vulnerable to falling into poverty in the event of sickness or an injury at work that makes them unable to work. Hence, extending social security coverage is a fundamental challenge for Arab countries.

To extend social security to all young workers, we need a complete understanding of the problem of low participation. First, it is useful to know workers’ attitudes and behaviour towards social security systems. One of the key points to clarify is whether young people are choosing to work informally: if the answer is yes, we need to understand why young workers choose informality.

The Sahwa survey provides some answers to these questions. It was conducted in 10,000 households in Algeria, Egypt, Lebanon, Morocco and Tunisia, interviewing 2,000 young people in each country.

The survey shows that 57% of the respondents are not interested in social security. Nearly a third (30%) seem to be pushed into informality because they say that their employers refuse to declare them or that the employers themselves are not declared for social security.

The remaining 13% provide other answers, showing that they are misinformed about the social security system. Most in this category think that they are not eligible because their position is temporary, which is not true: the social security system is open to non-permanent workers in each of these countries.

These results provide a clear answer to the question of whether informal employment is chosen voluntarily or is just a strategy of last resort. Indeed, more than half of young informal workers are not interested in current social security systems, according to the Sahwa survey. In all five countries, social security is contributory and may not be suitable for young workers’ needs and income.

One other factor that could explain the lack of interest is confidence in government. Given that social security schemes are public and administered by the government, workers who do not trust the government are less likely to participate.

The Sahwa survey shows that trust in government is low: when asked to what extent they trust government and administration in general, 67% and 71% of respondents say that they are not confident in government and administration, respectively. This lack of confidence makes young people avoid social security participation, as well as any form of political participation.

From social security participation to political participation

Young people in Arab countries seem to mistrust government, which makes them avoid politics and state affairs. The Sahwa survey highlights their low political participation: 84% of respondents say that that have never participated in political meetings or election campaigns, nor have they participated in politics on the internet.

One other proxy of political participation is voting: according to the Sahwa survey, only 12% of young people say that they always vote in elections. The data from Sahwa Survey also show the positive relationship between political participation and social security participation. The low political participation of young informal workers makes it less likely that policy-makers will understand their needs.

Towards more understanding of young informal workers’ preferences

To understand informal workers’ needs and preferences, CREAD has conducted two surveys in Algeria. The first covered 650 workers in the region of Algiers (see Merouani, 2015, for more details).

That survey’s results highlight workers’ willingness to pay for social security. They show that informal workers are willing to pay a slightly lower amount than the minimum contribution required by the current social schemes.

The second survey covered 2,000 households in the region of Telemcen, close to the border with Morocco, where informality is the main characteristic of the economy. Based on the hypothesis that the current pension system is not suitable for informal workers, the survey asked them what would be the most important factor to take into account when making pension saving decisions.

The results show that the three most important factors for workers are age of retirement, contribution rate and replacement rate. Workers are less interested in the management (public versus private) of the pension system, less interested in withdrawing some of their contribution in the event of liquidity constraints, and less interested in whether the scheme offers a defined benefit or defined contribution.

These results are likely to be similar in other Arab countries. This kind of survey provides more understanding of young informal workers’ needs, and could help to launch policies enhancing social security coverage in the Arab region.

Policy implications

What policy recommendations follow from the research evidence that would make access to social security universal for young workers?

According to the CREAD survey, they are willing to pay to get access to social security. Hence, policy-makers should review contribution rates, especially for young people. In this sense, we should think about the ‘save more tomorrow’ scheme (Thaler and Benartzi, 2003). This system supposes an increasing contribution rate, with young people contributing less than older people. This system seems coherent given that the young are less likely to be sick and they are still far from retirement age.

The second recommendation is to fit the social security benefit to workers’ needs and preferences. Young people are more interested in immediate benefits rather than pensions. Social security systems could attract youth participation by offering some immediate payments, such as transport and housing benefits.

Most previous research agrees that distance from social security funds and bureaucracy are barriers to social security participation (Maloney, 2004; Günther and Launov, 2012). Hence, policy-makers should think about launching online social security enrolment and payments, especially for young workers who are more likely to have access to the internet and smartphones (Merouani, 2019). In this context, it is worth mentioning the success of mobile banking in Africa (Ondiege, 2010).

Finally, using mass media to inform people about the value of social insurance could also be a good policy to enhance youth participation (Marczak, 2019). Indeed, our previous survey in Algeria shows that a significant proportion of informal workers have little or no knowledge about the social security system, and this does not promote increased participation (Merouani, 2015).

At the same time, a BBC Media Action survey shows that young people in Algeria, Libya and Tunisia have frequent access to social media (Merouani, 2019). Hence, disseminating knowledge about social insurance using social media could have a positive impact on youth awareness of social security – and thus increase their participation.

Further reading

Günther, I, and A Launov (2012) ‘Informal Employment in Developing Countries: Opportunity or Last Resort?’, Journal of Development Economics 97: 88-98.

Keyrouz, N (2016) Statistics of the Informal sector in the Arab Countries (

Maloney, W (2004) ‘Informality Revisited’, World Development 32: 1159-78.

Merouani, W (2015) ‘Les déterminants microéconomiques de la demande d’assurance sociale: de la théorie à l’application enquête au près de la population occupée en Algérie’, thesis dissertation, University of Caen-Normandie.

Merouani, W (2019) ‘The Impact of Mass Media on Voting Behavior: The Cross-country Evidence’, ERF Working Paper.

Marczak, R (2019) ‘Popularizing knowledge about pension scheme among young people’, conference paper, conference on pension communication, Leuven, 5 February 2019.

Ondiege, P (2010) ‘Mobile Banking in Africa: Taking the Bank to the People’, Africa Economic Brief 1(8).

Thaler, R, and S Benartzi (2004) ‘Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving’, Journal of Political Economy 112(S1).





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