Social Protection and Informality in Latin America during the COVID-19 Pandemic

Matias Busso, Juanita Camacho, Julian Messina and Guadalupe Montenegro

No 10849, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: Latin American governments swiftly implemented income assistance programs to sustain families' livelihoods during COVID-19 stay-at-home orders. This paper analyzes the potential coverage and generosity of these measures and assesses the suitability of current safety nets to deal with unexpected negative income shocks in 10 Latin American countries. The expansion of pre-existing programs (most notably conditional cash transfers and non-contributory pensions) during the COVID-19 crisis was generally insufficient to compensate for the inability to work among the poorest segments of the population. When COVID-19 ad hoc programs are analyzed, the coverage and replacement rates of regular labor income among households in the first quintile of the country's labor income distribution increase substantially. Yet, these programs present substantial coverage challenges among families composed of fundamentally informal workers who are non-poor, but are at a high risk of poverty. These results highlight the limitations of the fragmented nature of social protection systems in the region.

Keywords: Latin America; Informality; COVID-19; social insurance (search for similar items in EconPapers)
JEL-codes: I38 O15 O17 (search for similar items in EconPapers)
Date: 2020-11
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:10849

DOI: 10.18235/0002865

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