Informal Worker Access to Formal Social Protection in Sub-Saharan Africa: Evidence from Kenya and Tanzania

Abstract

Based on a combination of detailed survey data and in-depth interviews with informal workers in the construction, micro-trade, and transport sectors in urban areas of Kenya and Tanzania, this article explores the extent to which informal worker associations facilitate member access to formal social insurance schemes. The article provides unique insight into what characterises informal workers, and the circumstances under which associations may ensure social protection for their members. The analysis shows that members of informal worker associations are significantly more likely to participate in formal insurance schemes compared with non-members, albeit with some variation across location, sector, and worker types. These divergences relate partly to sector-specific and institutional constellations, as well as the ways in which informal worker associations function. Moreover, the article shows that informal worker associations often play a dual role by providing both direct short-term social cushioning and enabling enrolment in formal social insurance schemes. Their part in ensuring the achievement of universal social protection must therefore not be underestimated.

Keywords:

• Informal workers
• Kenya
• social insurance
• social protection
• Tanzania

JEL Classification:

• H55
• J46
• O17
• O55

Acknowledgements

This study is based on data collected as part of a large research project titled Informal Worker Associations and Social Protection (SPIWORK). The project was a collaborative effort between Roskilde University, Denmark, Nairobi University, Kenya, and Mzumbe University in Dar es Salaam, Tanzania. Immense gratitude is expressed to the whole SPIWORK team, especially Lone Riisgaard and Winnie Mitullah for their constructive feedback, and to those who kindly took time to share their experiences and knowledge. The author would also like to thank two anonymous referees whose insightful comments helped to improve the paper.

Disclosure statement

No potential conflict of interest was reported by the author.

Data availability statement

The data used in the paper is available on the project website: https://forskning.ruc.dk/da/projects/informal-worker-organisation-and-social-protection. The codes (do-files) are provided in the Supplementary Material available online. I remain solely responsible for any errors and omissions.

Notes

1 Appendix B outlines the definition of the informal economy used, as well as the different categories and sectors covered.

2 See Box 1, Appendix A.

3 Torm et al. (2021) provides more detail.

4 KIKOA’s demise happened after the data gathering for this article in 2018 and early 2019.

5 Schmalz, Ludwig, and Webster (2018) provides a review.

6 Riisgaard et al. (2021).

7 Appendix B provides further detail on the sampling strategy.

8 In Kenya, the association membership percentage shares are 33, 47, and 67 for construction, micro-trade, and transport, respectively; for Tanzania the equivalent figures are 19, 34, and 50.

9 Box 2 (Supplementary Material) elaborates on the earnings variable.

10 See Tables 4 and 5 (Supplementary Material).

11 Indimuli et al. (2023) show that in Kenya a common barrier to enrolling in formal social insurance schemes is irregular earnings, rather than the level per se. Other less measurable factors are discussed in section 6.

12 See Table 8 in Supplementary Material.

13 Wageworkers that are WRA or SVC members are, respectively, 76 pct. and 80 pct. more likely to have social insurance. Moreover, 77 pct. of transport workers belong to a WRA, and 22 pct. are in a SVC, yet with substantial regional variation.

14 Boda-bodas are bicycles and motorcycle taxis commonly found in East Africa

15 This legal requirement is reflected in the data with 67 pct. of transport workers being association members in Kenya, and an even higher share in Kisumu (78 pct.).

16 See Table 9 (Supplementary Material). Table 10 (Supplementary Material) also shows that when splitting the membership variable both the SVC and WRA grouping are significant, whilst in Table 2 only the former was significant.

17 In Kenya, the median monthly association contribution across the three sectors was KES 1500 compared to the KES 500 voluntary contribution to the NHIF.

18 The Big 4 Agenda is President Kenyatta’s development blueprint, comprising food security, affordable housing, manufacturing, and affordable healthcare.

19 See Table 8 (Supplementary Material).

20 Riisgaard et al. (2021) argue that representation should be included in social protection discourses as it is of key importance in terms of ensuring that informal workers have a say in the elaboration of relevant policies and more generally on issues affecting their work and living conditions.

21 Swahili term for women who cook and sell food/snacks on the side of the road.

Additional information

Funding

This work was supported by Ministry of Foreign Affairs in Denmark.