ADAPTING TO AN AGEING SOCIETY IN DEVELOPING COUNTRIES: ESSAY ON HOW TO EXTEND SOCIAL SECURITY COVERAGE IN MOROCCO

Like many other developing countries, Morocco is currently working on reforming its social security system. Fertility rates in this country went from 5.7 births per woman in the early 80s to 2.2 births per woman in 2011. This is a new phenomenon for southern Mediterranean countries that are starting to face population ageing while still facing other development problems. The reform currently discussed by the government and the unions barely mentions the crucial issue of extending social security coverage to the entire population. Yet, in Morocco, only 18% of the labor force contributes to the pension system and only 16% of the people above 60 receive pension benefits. This paper is an empirical study of this uncovered share of the population based on labour force survey data. How to extend social security depends on the main characteristics of informal workers. It also depends on whether most informal jobs are involuntary or the result of a choice made by workers to avoid paying taxes and social security contributions. The paper draws a complete panorama of this non-contributing share of the population in Morocco, using the 2009 Labor Force Survey data. It also estimates the probability of informal employment depending on both individual and professional characteristics. Overall results confirm that the informal labor market is heterogeneous and it seems that most informal jobs are involuntary. The study brings out a number of lessons, enabling us to suggest more suitable solutions to extend social security coverage in Morocco than those currently in discussion.

Keywords:

informality , informal employment , labor market , pension system , social security , Morocco