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

Rania Roushdy and Irene Selwaness

Journal of International Development, 2019, vol. 31, issue 8, 720-751

Abstract: 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.

Date: 2019
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https://doi.org/10.1002/jid.3434

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Persistent link: https://EconPapers.repec.org/RePEc:wly:jintdv:v:31:y:2019:i:8:p:720-751

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