Protecting All: Risk-sharing in a Diversifying World of Work

Protecting All: Risk-sharing in a Diversifying World of Work


The world of work is diversifying. Global disruptions such as technology, economic
integration, social, demographic and climate change have fundamentally altered the nature
of work in countries at all development levels, including the developing world. Adjusting to these changes requires new risk-sharing
policies. We need to find new ways to protect people
from impoverishing and catastrophic shocks with better tools that are not tied to the
workplace – to manage risk and uncertainty, to build and protect their human capital. In low-income countries, work has always been
diverse and fluid. More than half of the workforce is part of
the informal economy; moving from job to job, and from wage- to self-employment and back. These informal workers don’t benefit from
traditional, employment-based social protection models. In high-income countries, disruptive forces
are transforming how people work. People switch jobs every few years or engage
in short stints in the new gig economy; combining part-time jobs and self-employment, earning
a living in different ways. This unexpected convergence in all the ways
in which people across the world are working leads to a mismatch between these risk-sharing
policies and the workers they are intended to protect. Up to now, we have relied on the workplace
as a stable platform for providing protection. The employer is the implementing agent between
the benefactors and the state social protection policies. Instead of relying so heavily on payroll financing
and employment situation to provide protection, a broader system of public revenue and spending
is needed for more reliable and equitable coverage against losses. Diversity and fluidity in the world of work
challenge these two fundamental assumptions, requiring a re-think and a new model of worker
protection. Rather than protect workers from change, governments
should protect them for change. Adapting a new set of risk-sharing policies
would provide a comprehensive package of safety nets, insurance, savings, and services with
a guaranteed minimum coverage for all. By putting in place a new social contract,
countries can end intergenerational poverty, protect from impoverishing catastrophic losses,
and help propel their economies. Learn more at worldbank.org/sp

2 Replies to “Protecting All: Risk-sharing in a Diversifying World of Work”

  1. The global economy is in a transitional phase and evolution is a harsh reality that many do not understand; Be self reliant, protect yourself, and understand that there will always be those without.

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