Social protection in Egypt: A policy overview

Abstract

The need to address the shortcomings of Egypt's current social protection system as part of a broader process of developing a new social contract between the Egyptian government and its citizens has been noted for a number of years. With a new government recently put in place, Egypt is now at a potential turning point in terms of implementing unfinished reforms to the system or proposing alternative ones. The aim of this paper is therefore to provide an overview and assessment of current public social protection mechanisms and suggest directions for new policy measures. The social and health insurance systems are covered, as well as the social assistance program that provides non-contributory pensions. Recommended policy measures to improve the current social protection system fall into three interrelated categories: strengthening the link between contribution and benefit levels, expanding coverage, and improving the administration of the system.

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

“…Therefore, we opted to exclude them. 1 These findings emphasise several of the major shortcomings of the Egyptian SIS that have often been highlighted in the literature, namely, basing the retirement benefit on the wage levels of the last few years of work, the relatively high contribution rate and the weak capacity of law enforcement (Helmy, 2008;Sieverding & Selwaness, 2012).…”

“…A similar pattern holds for the public sector workers. This can be partly attributed to the maximum cap on the insurable basic wage, stipulated by the SI law (Sieverding & Selwaness, ). Low‐wage earners are more likely to pay SI contributions on their entire basic wage, relative to high‐wage earners.…”

“…This decline, particularly among wage workers, has been attributed to the decline in public sector hiring, as well as to the high cost of participation in the SIS combined with weak enforcement of law. This high cost of SI causes many employers to negotiate higher pay, with their potential employees, in return of not having SI coverage or to report lower basic wage and then the actual salary of their worker to the SI authority (Sieverding & Selwaness, 2012;Roushdy & Selwaness, 2015). These factors resulted in the expansion of informal wage work, which lacks any type of social protection benefits, in Egypt as in similar developing countries (Perry et al, 2007;Angel-Urdinola & Tanabe, 2012;Gatti, Bodor, Angel-Urdinola, & Silva, 2014).…”

Poverty-alleviation programs in Tunisia: selection processes and targeting performance indicators at the regional level

“…In this regard, Notten (2015) argues that, based on data from European countries, poverty indicators used in the beneficiary selection regularly disagree about a person's poverty status, and that such disagreement also confounds estimates of a program's poverty reduction effects. Moreover, the determination of whether an applicant meets the eligibility criteria is sometimes based on the subjective judgment of the ministry social employees (Sieverding and Selwaness, 2012). For instance, in the case of Egypt, Bibars (2001) finds that obtaining access to pensions from the social aid and assistance program is complicated because it is often based on the whims of the social workers who are in charge of administering the aid.…”

Do pensions reduce the incentive to work? Evidence from Egypt

“…The system is now a Pay-As-You-Go (PAYG) one in which current pensions for retirees are paid from the contributions of current workers. People who are from 60 years old and have at least 120 months of contributions are eligible for contributory pensions (Sieverding and Selwaness 2012;Ameta and El Shafie 2015).…”