Egypt’s New Social Insurance System: An NDC Reform in an Emerging Economy

Maait, Mohamed; Demarco, Gustavo C.

doi:10.1596/9780821388488_ch05

Cited by 7 publications

(19 citation statements)

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“…Employees had to pay 10% of their wage as contributions for old-age, death, and disability insurance, which meant that they had to pay 14% of their wage for social insurance overall. Employers also needed to pay 15% of the payroll as contributions for old-age, death, and disability insurance, and so their total contribution rate amounted to 26% (Maait & Demarco, 2012).…”

Section: Shortcomings Revealed In the Pension Programme During The Mubarak Eramentioning

confidence: 99%

“…Although these invested reserves were expected to generate a surplus, low or negative actual returns had been recorded since 1975 and had eroded the reserves. Consequently, failed investments forced the government to spend on ad hoc fi nancial support to maintain benefi t levels (Maait & Demarco, 2012).…”

Section: Shortcomings Revealed In the Pension Programme During The Mubarak Eramentioning

confidence: 99%

“…To solve these problems, the Mubarak government began to consider a radical reform of the social insurance system in 2005 (Maait & Demarco, 2012). On 13 June 2010, the Egyptian Parliament passed a pension reform law (Law 135/2010), which entailed that existing social insurance laws be abolished.…”

Section: Current Pension Reform In Egypt Pension Reform In 2010mentioning

confidence: 99%

“…incentives and bonuses) in contributions, while employers paid 15% and 2% of employees' basic and variable earnings, respectively (Social Security Administration, 2011). Th e new law amalgamated these two contribution rates (for basic and variable earnings) and provided that employers and employees pay 13% and 9% of employees' earnings, respectively (Maait & Demarco, 2012). Th rough this reform, total contribution rates for social insurance reduced from 26% to 19.5% for employers and from 14% to 11% for employees (Selwaness, 2012).…”

Section: Current Pension Reform In Egypt Pension Reform In 2010mentioning

confidence: 99%

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Pension Reform in an Authoritarian State: A Case Study of Egypt

Kawamura¹

2021

PAI

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This article focuses on two pension reforms in Egypt in order to understand the dynamics of social policy reform under authoritarian rule. One was supported by the World Bank and promulgated in 2010. It included drastic changes, such as the introduction of a defined benefit scheme, and ultimately failed. Another was successfully implemented in 2019. Compared to the 2010 reform, the 2019 reform involved only parametric change (such as increasing the retirement age and amalgamating social insurance funds), in order to mitigate the criticisms that had been made of the previous pension reform and to facilitate gradual, steady enhancement of the programme’s sustainability. The findings suggest that perceptions of authoritarian leaders as having wide-ranging discretion in decision-making concerning public policy and being able to more decisively implement harsh social reform compared with democratic political leaders need to be reconsidered.

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Section: Shortcomings Revealed In the Pension Programme During The Mubarak Eramentioning

confidence: 99%

Section: Shortcomings Revealed In the Pension Programme During The Mubarak Eramentioning

confidence: 99%

Section: Current Pension Reform In Egypt Pension Reform In 2010mentioning

confidence: 99%

Section: Current Pension Reform In Egypt Pension Reform In 2010mentioning

confidence: 99%

See 2 more Smart Citations

Pension Reform in an Authoritarian State: A Case Study of Egypt

Kawamura¹

2021

PAI

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“…In Egypt, several shortcomings of the SIS have often been highlighted in the literature and can be linked to the prevalence of informality. First, the high SI contribution rates, requested from both employees and employers, represent an entry cost and a disincentive for enrolment (Loewe, , ; Maait & Demarco, ; Roushdy & Selwaness, ). Second, the fact that the pension amount is based on the average monthly earnings during only the last few years in service can encourage workers to under‐report their pensionable wage during their first years of work and then to fully report their wages later near the end of their service to receive high pensions (Robalino et al, ).…”

Section: Conceptual Framework and Empirical Considerationsmentioning

confidence: 99%

Who Is Covered and Who Under‐reports: An Empirical Analysis of Access to Social Insurance in Egypt

Roushdy

Selwaness

2019

J of Intl Development

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This paper investigates the dynamics and determinants of having access to social insurance coverage on the Egyptian labour market among wage and non‐wage workers. The paper explores two issues: the worker‐level and firm‐level determinants of having access to social insurance and the risk of under‐reporting insurable wage to the social security authority. With the use of data from the Egyptian Labor Market Panel Survey of 2006 and 2012, the likelihood of being enrolled in social insurance is estimated by a probit regression model for all workers, for wage and non‐wage workers, separately. The potential endogeneity between the type of work and social insurance access is addressed using instrumental variables approach. Results show that men, older, married, better educated and white‐collar highly skilled workers are more likely to be socially insured. Under‐reporting insurable wages is positively correlated with working outside the establishment and basic monthly wage, while it is negatively correlated with tenure and white‐collar occupations. High contribution rates requested from both the employer and employee, combined with basing benefits on wage level of the last few years of service, and the weak capacity of law enforcement encourage employers and employees to either not participate in the social insurance system or contribute on amounts that are lower than their actual wage. This paper is one of the few studies that focus on the phenomenon of coverage gap and under‐reporting salaries to the social security administration. © 2019 John Wiley & Sons, Ltd.

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Egypt’s reformed social insurance system: How might design change incentivize enrolment?

Barsoum

Selwaness

2022

Int Social Security Review

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In 2019, the Government of Egypt issued a new legal framework for its social insurance system. Aside from providing a unified scheme covering different groups of workers, the new regulation allowed for systemic and parametric reforms that were aimed in large part at addressing the challenge of workers’ low enrolment in social insurance, with an emphasis on informal workers. The reforms reduced the rate of contributions paid by employees and employers, increased the penalties for employers who do not register their workers, and improved the benefits structure. The law also specified provisions to facilitate the enrolment of informal workers by offering to cover the employer’s share of their contributions. However, the law limited such improved access to nine specific categories of informal workers, a decision that fails to recognize the diversity of informal forms of work. Based on the analysis of the characteristics of contributors to the previous system, this article argues that structural barriers pertaining to the large numbers of low‐earners and informal enterprises in the economy will likely hinder the expansion of system enrolment despite the legal reforms.

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Egypt’s New Social Insurance System: An NDC Reform in an Emerging Economy

Cited by 7 publications

References 0 publications

Pension Reform in an Authoritarian State: A Case Study of Egypt

Pension Reform in an Authoritarian State: A Case Study of Egypt

Who Is Covered and Who Under‐reports: An Empirical Analysis of Access to Social Insurance in Egypt

Egypt’s reformed social insurance system: How might design change incentivize enrolment?

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