Module 6: Quantifying gaps and measuring coverage ILO, 2013

Key questions What questions should be asked about the overall social protection system? What are the multiple dimensions of coverage? How to measure legal coverage? How to measure effective coverage?

Questions on mapping the overall system Main questions Sources and tools  Coverage:  Who is covered? (segregated by gender, age groups, poverty level, formal/informal employment, other vulnerable groups)  Which contingencies are covered and what is the benefit level?  What is the impact (potential/actual) of the benefits?  Spending and financing:  What are the financing sources?  How much does it cost to operate the scheme? How to?  Identify schemes and benefits provided (categorization of data)  Find data on actual benefit amounts, coverage, spending and financing sources Data sources: administrative data from social security schemes (primary source) complemented by survey data on coverage, impact Tool: ILO social security inquiry database

Main questions about coverage gaps and needs Sources and key factors to consider Who is not currently covered, but in need of coverage? What needs do they have? What risks are they exposed to? What are the options for extending coverage? What is their employment situation? How can they contribute? What is the potential cost of extending coverage? Sources include household income and expenditure surveys, labour force surveys to identify people not covered or insufficiently covered Identification of groups with different needs or features, requiring different options for extending coverage Key factors to consider include age, area of residence, labour market structure, ability to work, employment status, capacity to contribute, poverty status Questions on coverage gaps and needs

Multiple dimensions of coverage Coverage Level of legal coverage Level of effective coverage Persons protected or ‘potential’ beneficiaries Actual beneficiaries Mainly statutory Statutory vs. effective Number and type of schemes covered by law Extent of legal coverage Extent of effective coverage Persons legally protected or ‘potential’ beneficiaries (by law) Average (effective) benefit amount Benefit level stated in the law Multiple dimensions Scope Extent Level

Multiple dimensions of coverage For a particular social benefit, coverage is a multidimensional concept with at least three elements: Mainly statutory information  Scope: number and type of social security branches / functions to which the population has access (by law) Both statutory and effective  Extent: percentage of persons covered within the whole population or the target group [legal and effective]  Level: adequacy of coverage by a particular social protection benefit, measured by the level of cash benefits (absolute or relative to benchmarks such as previous income, average income, poverty line) [legal and effective]

Multiple dimensions of coverage Extent of legal coverage for a particular social protection benefit = Estimated number of people covered by law as appropriate Total employed persons / EAP / total population

Measuring effective coverage Measuring social protection coverage and resulting coverage gaps should follow a set of principles: Principle 1 Coverage indicators by social security branch  Coverage is to be measured separately for each risk or social security benefit e.g. separate coverage indicators for health care, old age, unemployment  People may have access to one benefit, but not to all others

Measuring effective coverage Principle 2 Coverage of schemes for specific benefits can be understood in two ways: “potential” coverage and actual coverage  These two concepts are complementary to each other and should be assessed separately

“Potential” coverage: represents people protected against a risk if needed, e.g. members of a social insurance scheme (not necessarily benefiting yet) = Active contributors / total insured persons / people satisfying the criteria for a non-contributory benefit Reference population, e.g. total employed persons / EAP / total population / other target groups Measuring effective coverage

Actual coverage: represents those people actually receiving benefits at a certain point in time = Persons who actually receive the benefit (for a given contingency) Reference population: target population for a particular social security contingency, e.g. elderly people above 60 years of age for old-age pensions Measuring effective coverage

Principle 3 Double counting of beneficiaries can occur when an individual is covered and eligible for several benefits, which are provided by the same or different schemes (example: basic and supplementary old-age pension) Solutions:  Distinction should be made between basic and supplementary benefits, and people benefiting from supplementary or top-up benefits, in addition to the basic scheme, should not be counted  Calculating coverage separately for each contingency / branch  With household survey data, individuals are considered as reference units, which allows identification of people receiving multiple benefits

Measuring effective coverage Principle 4 Choice of parameters like reference population, e.g. ideally, no. of pensioners should be compared with people above the statutory pensionable age Factors to be considered:  Trade-off between national circumstances (and relevance of the indicator at the national level) and cross-national comparability  Availability and accuracy of detailed information  Other factors such as existence of multiple statutory pensionable ages, early retirement