How To Calculate Population And Labor Force Data In The World

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1 World Bank-Hitotsubashi-MOF Workshop on Closing the Coverage Gap: The Role of Social Pensions February 20-22, 22, 2008 Measuring the coverage of formal old-age income protection systems around the world Montserrat Pallares-Miralles Social Protection Specialist HDNSP, The World Bank

coverage of formal old-age income protection systems around the world

2 Outline of the presentation Section I. Data limitations, misconceptions, and selection criteria for measuring coverage Section II. Some results on population and labor force data in the world Section III. Some results on coverage of mandatory pension systems data in the world

3 Section I Data limitations, misconceptions, and selection criteria for measuring coverage Various difficulties in providing comparable international statistics

4 Main sources of data Main sources: Administrative data from national social security and statistical institutions: a) annual, and other published reports b) databases Household and labor force surveys International institutions: ADB (Asian Development Bank) ILO (International Labor Force) IMF (International Monetary Fund) ISSA /SSA (International Social Security Administration / Social Security Administration US) OECD WHO (World Health Organization)

institutions: ADB (Asian Development Bank) ILO (International Labor Force) IMF (International Monetary Fund) ISSA

5 Main data constraints Availability and quality of data: Lack of capacity and resources on the national level Lack of collection and aggregation mechanisms at the national level Missing or wrong information of individual records Lack of information on the people that are not covered Corruption, evasion, and abuse of the systems Concepts and definitions Labor force Active members Beneficiaries

wrong information of individual records Lack of information on the people that are not covered

6 Some problems with concept definitions (labor force data) Variations in national definitions of labor force concept: Differences in the exclusion and inclusion of rural areas Different considerations of contributing family workers Different considerations of unemployed not looking for work Differences in age limits used in measuring the economically active population Different treatment of emigrants Different ways of defining informal labor force

family workers Different considerations of unemployed not looking for work Differences in age limits used in

7 Some problems with concept definitions (pensions data) From the active population side: Contributor vs non-contributor Contributor vs active member Active contributor vs pasive contributor (dormant accounts, affiliates...etc) From the pasive population side: Beneficiary type: old-age, disability, survivors, and others Number of benefit payments vs number of beneficiaries Possibility of various benefits for one individual from one institution Possibility of various benefits for one individual from various institutions (particularly for civial servants or other special schemes) Non-contributory pensions Regular payments vs lump-sum payments, and/or benefits in kind

..etc) From the pasive population side: Beneficiary type: old-age, disability, survivors, and others Number of benefit payments vs number of beneficiaries Possibility

8 Section II Some results on population (rapid population ageing), and labor force data in the world

9 Average projected life expectancy at birth by region High-Income East Asia LAC MENA South Asia ECA Sub-Saharan Africa

MENA South Asia ECA 50 40 Sub-Saharan Africa 30

10 Average projected fertility rates (birth per women), by region Sub-Saharan Africa South Asia MENA LA East Asia ECA High-Income

11 Projected support ratios ( population / population 65+ ), by region Sub-Saharan Africa 16 pop / pop LAC East Asia South Asia MENA 4 ECA 2 High-Income

pop 65+ 14 12 10 8 6 LAC East Asia South Asia MENA 4 ECA 2

12 Population over 65 years old in the world ( past, present, and projected ) 16% Population over 65 years old in the world 14% 12% 10% 8% 6% 4% 2% 0%

old in the world 14% 12% 10% 8% 6% 4% 2% 0% 1960 1970

13 Population over 65 years old in the world ( 1960 ) Where were the elderly in the world in 1960? 38% IN SOUTH & EAST ASIA 38 % IN HIGH INCOME COUNTRIES 13% IN EUROPE & CENTRAL ASIA 4% IN SUB-SAHARAN AFRICA 5 % IN LATIN AMERICA & THE CARIBBEAN 2% IN NORTH AFRICA & THE MIDDLE EAST Note: high income economies in the regions are included in the high income group of countries. The regions only include low and middle income countries, according to WB definition.

IN LATIN AMERICA & THE CARIBBEAN 2% IN NORTH AFRICA & THE MIDDLE EAST Note: high income economies in the regions

14 Population over 65 years old in the world ( 2005 ) Where are the elderly now? 43% IN SOUTH & EAST ASIA 31% IN HIGH INCOME COUNTRIES 11% IN EUROPE & CENTRAL ASIA 5% IN SUB-SAHARAN AFRICA 7 % IN LATIN AMERICA & THE CARIBBEAN 3% IN NORTH AFRICA & THE MIDDLE EAST Note: high income economies in the regions are included in the high income group of countries. The regions only include low and middle income countries, according to WB definition.

% IN LATIN AMERICA & THE CARIBBEAN 3% IN NORTH AFRICA & THE MIDDLE EAST Note: high income economies in the

15 Population over 65 years old in the world ( projected 2045) Where are the elderly projected to be in the future? 52 % IN SOUTH & EAST ASIA 8% IN EUROPE & CENTRAL ASIA 21% IN HIGH INCOME CO S 5% IN SUB- SAHARAN AFRICA 5% IN NORTH AFRICA & THE MIDDLE EAST 9 % IN LATIN AMERICA & THE CARIBBEAN Note: high income economies in the regions are included in the high income group of countries. The regions only include low and middle income countries, according to WB definition.

AFRICA & THE MIDDLE EAST 9 % IN LATIN AMERICA & THE CARIBBEAN Note: high income economies in the regions are included

16 Percentage of the population over 65 years old (1960) 1960 Percentage of Population over 65 Years of Age 1 to 9 9 to to 26

17 Percentage of the population over 65 years old (1980) 1980 Percentage of Population over 65 Years of Age 1 to 9 9 to to 26

18 Percentage of the population over 65 years old (2005) 2005 Percentage of Population over 65 Years of Age 1 to 9 9 to to 26

19 Percentage of the population over 65 years old (2025) 2025 Percentage of Population over 65 Years of Age 1 to 9 9 to to 26

20 Percentage of working age population (15-64), (2005) Percentage of working age population (15-64 ) 0 to to to 100

21 Total labor force participation rates (2005) Labor Force Participation Rates 30 to to to 100

22 Labor force participation rates of the elderly -people over 65 (1950) 1950 Labor force participation rates (%) of people over 65 years of age 0 to to to 100

23 Labor force participation rates of the elderly -people over 65 (2000) 2000 Labor force participation rates (%) of people over 65 years of age 0 to to to 100

24 Evolution of total labor force participation rates ( ) 85 % of population ages East Asia & Pacific Sub-Saharan Africa High-income countries Latin America & C. Europe and Central Asia South Asia Middle East and North Africa

25 Labor foce participation rate of the elderly ( ) 70 Activity rates of the population of 65 years old and older, by region 60 % of population ages Sub-Saharan Africa 40 South Asia 30 Latin America & C. 20 East Asia & Pacific Middle East & N. A. 10 Europe & Central Asia High-income countries

26 Section III Some results on coverage of mandatory pension systems in the world

27 Relationship between coverage (active members / labor force), and income per capita Coverage ( active members as % of labor force) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Egypt Guyana St. Lucia St. Kitts & Nevis Tunisia Chile y = 3E-05x R 2 = Portugal Argentina Spain Greece United States Norway Iceland Ireland GDP per capita, PPP (current international $)

28 How many people are really covered by formal old-age income protection systems? Pension systems do not reach most of the vulnerable people in the world Less than 30 percent of the labor force population in the world is covered Less than 20 percent of the elderly in the world are covered Most covered people are in formal sector (big companies and public sector). Very low coverage in rural sector and for self-employed, women, and low-income workers Coverage has been quite constant, or has even decreased in some countries, particularly in the ECA region ( what drives the informal sector is likely to drive pension coverage )

29 Coverage I. Active members of mandatory pension systems as % of labor force Coverage (active members / labor force) 0 to to to to 100

30 Coverage II. Active members of mandatory pension systems as % of pop Coverage (active members / working age population ) 0 to to to to 100

31 35% 30% 25% 20% 15% 10% 5% 0% Number of total beneficiaries as % of population, country cases 18.8% 11.0% 11.4% 11.8% 11.9% 4.8% 5.3% 5.5% 0.7% 0.9% 1.2% 1.5% 1.5% 1.7% 2.0% 2.2% 33.0% Bulgaria Ghana Cape Verde Senegal Peru Morocco St. Lucia Iran Ecuador Korea Rep. Egypt Tunisia Malta Argentina Bosnia Albania Spain Total Beneficiaries as % of Population

32 80% 70% 60% 50% 40% 30% 20% 10% 0% Old Age beneficiaries (as % of total beneficiaries), country cases 71% 72% 55% 56% 59% 60% 60% 63% 64% 43% 48% Bosnia Cape Verde Morocco Ecuador Malta Senegal Paraguay Iran Tunisia St.Lucia Spain Percentage of total beneficiaries

33 Social pensions in the world Impact Index: recipients as % of 65+ pop, multiplied by benefit as % of income per capita ("All others" indicates countries with non-existent social pensions, or no information) to to All Others

34 Needs / objectives Collection, storing, and dissemination, on a regular and sustainable basis, comparable statistics on social insurance systems Provision of basic qualitative and quantitative information in order to improve the quality of data and to facilitate analyses Improve statistical knowledge base on social security on the national and international level Improved capacity of member organizations to work towards the extension of social security coverage Further research to produce a reliable estimation of coverage indicators

35 Conclusions Data is needed and important in order to do well informed policy decisions (efficient international data collection through interagency co-operation should be increased) Coverage of mandatory pension systems is still very low, particularly in the regions of south Asia, and sub-saharan Africa were less than 10 percent of the labor force are covered Some of the issues that explain the low coverage are: the high cost of joining the formal sector, contributions are perceived as taxes, and schemes are poorly designed and managed Given the current estimates of low coverage, and ageing populations, more social pensions and further alternatives of formal old-age income protection measures should urgently be considered

PORTABILITY OF SOCIAL SECURITY AND HEALTH CARE BENEFITS IN ITALY

PORTABILITY OF SOCIAL SECURITY AND HEALTH CARE BENEFITS IN ITALY Johanna Avato Human Development Network Social Protection and Labor The World Bank Background study March 2008 The Italian Social Security