[Policy Brief] Informal Labor Markets: Extending the Reach of Social Protection

Problem
Over 2B workers (60% of global labor force) are informal, excluded from SP. In Vietnam, 56% lack pensions or health coverage. Without tailored schemes, universal protection is impossible.

Evidence

• India’s e-Shram portal registered 250M informal workers.

• Kenya’s Mbao Pension Plan uses mobile money for micro-contributions.

• Uruguay reduced domestic worker informality by 20% via subsidized employer contributions.

Policy Options

1. Micro-contribution models: flexible, mobile-based payments.

2. Hybrid financing: subsidies + contributory floors.

3. Digital IDs/registries: portable entitlements for informal workers.

4. Sector-specific schemes: domestic workers, vendors, gig platforms.

Impact
Extending SP to informal workers reduces vulnerability, closes equity gaps, and strengthens national resilience.