Informal Economy, Independent Workers and Social Security Coverage in Argentina, Chile and Uruguay

This article reviews the labour situation of independent workers regarding social security coverage in Argentina, Chile and Uruguay. These workers account for approximately 24 per cent of the employed labour force and most of them work in the informal economy. The scope of social protection for independent workers has become a relevant issue in the reform agendas for the social security systems. Low coverage among this heterogeneous group of workers, together with the difficulties of implementing effective policies and strategies that will allow for increased coverage, have created the need to evaluate the different dimensions that are involved in the design of social security programs. Even though Argentine and Uruguayan workers have mandatory legal coverage through a general scheme and also a simplified scheme directed at small contributors, the overall results have been poor. Furthermore, the Chilean Congress is discussing a proposal to include mandatory contributions for non-salaried workers. This document identifies and comments on several relevant issues associated with the design of social security programs that may have various implications in terms of financing, coverage and informality.