Pension Coverage and Informal Sector Workers

Pension reform around the world in recent decades has focused mainly on the formal sector. Consequently, many of those working in the informal sector have been left out of structured pension arrangements, particularly in developing countries – a serious problem given this group are often low income earners, vulnerable to economic volatility and change. However, since the turn of the millennium, efforts in a range of countries have increasingly highlighted improving pension coverage for informal sector workers. This paper provides an overview of selected country experience in this regard, and provides some suggestions for governments in developing countries considering implementing their own pension reform to ensure that informal sector workers receive the retirement income they need.