Publication: Social Insurance for Gig Workers: Insights from a Discrete Choice Experiment in Malaysia
The rise of “gig” or digital platform work globally has led to both enthusiasm for its potential to create lucrative employment for large numbers of people, as well as concern about its implications for worker protection that is often provided in more standard employment. While gig work platforms may not be akin to employers in standard work relationships, arrangements that do not obligate them to provide worker protection and social insurance contributions may leave several platform workers unprotected against a range of risks. Is the observed lack of protection among digital platform workers explained by an unwillingness on part of the workers themselves to make necessary contributions for social insurance coverage? This paper analyzes this question in the context of Malaysia, a rapidly growing upper-middle-income East Asian economy that has witnessed a rise in gig work in recent years. The paper deploys a novel vignette-based experiment to ascertain gig workers’ willingness to pay for social insurance coverage. The analysis finds overall a large unmet need for social insurance among gig workers, as well as a high level of willingness to pay for (especially) unemployment insurance, retirement savings, and accidental and injury insurance. This implies that the policy challenge is to channel such willingness into regular contributions for social insurance coverage through relevant and flexible options for contributions. More than subsidies, this segment of the workforce could perhaps benefit from better tailored, more flexible, and more easily accessible instruments for social insurance. The analysis also finds evidence of substitution between distinct insurance instruments. For instance, those who have access to retirement savings appear to be less willing to pay for unemployment insurance, and those with private medical insurance are less likely to contribute to the state-run injury insurance scheme. This underlines the need to approach risk insurance for digital platform workers more holistically and to consider a wider range of insurance instruments, including those offered by the private sector.
Link to Data Set
“Ghorpade, Yashodhan; Jasmin, Alyssa. 2023. Social Insurance for Gig Workers: Insights from a Discrete Choice Experiment in Malaysia. Policy Research Working Papers; 10629. © World Bank, Washington, DC. http://hdl.handle.net/10986/40741 License: CC BY 3.0 IGO.”
Other publications in this report series
PublicationDoes Unequal Tax Burden Contribute to Women-Owned Businesses Leaving the Tax Net ?(Washington, DC: World Bank, 2024-02-27)This study investigates gender disparities in the tax burden in Addis Ababa, Ethiopia, using data on 2,320 taxpayers for 2011 and 2012. A quantile regression analysis is employed to control for firm characteristics such as sector, size, and age. The results show that women-owned businesses are more likely to operate in low-profit sectors and report lower sales and tax liabilities than men-owned businesses. However, women-owned businesses pay as much as men-owned businesses in taxes, suggesting that they are subject to a higher effective tax rate. This, in turn, may lead to women-owned businesses exiting the tax net at a higher rate. These findings suggest that gender disparities in tax compliance are not simply due to differences in firm characteristics but may also be due to biases in tax declaration and enforcement processes. PublicationDoes Financial Development Reduce Gender Disparity in Top Manager Positions in Manufacturing SMEs in Developing Countries ?(Washington, DC: World Bank, 2024-02-26)Women often face more hurdles than men in obtaining finance. This is especially so when credit supply is limited and financial markets are less developed. As a result, owners of firms may prefer men over women as top managers of their firms, widening the gender gap in top manager positions. This paper tests this idea using firm-level survey data for small and medium-size formal manufacturing enterprises in 47 developing countries. The results confirm a positive relationship between credit supply and the likelihood of having a woman versus a man as the top manager. This positive relationship is much stronger in industries that are more dependent on external sources of finance for technological reasons. It is also stronger in countries with poor coverage by credit bureaus and low competition between banks, which is consistent with “statistical” and “taste-based” discrimination against women borrowers. The main result is robust to several endogeneity checks, sample alterations, and alternative measures of credit supply and financial development. PublicationWhich Firms Drive the Gains from Connectivity and Competition?(Washington, DC: World Bank, 2024-02-26)This paper uses the construction of India's Golden Quadrilateral (GQ) highway to explore the impact of an exogenous increase in market access and competition across the firm life cycle and generates four findings. First, while exit rates fall for all plants, aggregate gains are driven by expansion of young plants. Older plants stagnate or contract, consistent with the challenges of increased competition for incumbents. Second, the benefits of connectivity to young plants depend on access to complementary factors, such as finance, and business conditions, although older plants respond better in more distorted districts, perhaps reflecting access to inputs while protecting output markets as in de Loecker et al. (2016). Third, expanding young plants correspond to capital intensive value chain embedded activities that do not require close coordination with final producers. Fourth, plant-level panel data confirms plant capabilities as central to both the magnitude of the response, and to the composition of plants driving it. Aggregate expansion among young plants is driven by high skill plants while contraction of old plants is driven by low skill plants, consistent with frontier firms being able to escape competition (Aghion et al. 2014). PublicationStages of Diversification Redux(Washington, DC: World Bank, 2024-02-22)The existing literature on development and economic diversification finds an inverted-U function between these two variables, whereby economies diversify as they grow up to a point, after which they start specializing. This paper contributes to this literature by investigating the stages of diversification over the course of development during the past 57 years. The paper emphasizes the trajectories of resource-rich and resource-poor countries, an issue that has not been covered by the extant literature. In addition, the paper studies the stages of diversification across three dimensions, namely employment, value-added, and exports. Additionally, it examines the relationship for services. Non-parametric estimations suggest a U-shaped curve between measures of economic concentration and per capita income levels, which is in line with existing evidence. However, these patterns are mainly driven by between-country rather than within-country variation, a finding that had been ignored in the existing literature. Diversification patterns also differ across resource-rich and resource-poor countries: Employment and value added in resource-rich countries are on average more concentrated at low levels of development while in resource poor countries, they are more concentrated at high levels of development. In contrast, at all levels of development, exports are more concentrated in resource-rich countries. PublicationCosts of Health Care Associated Infections from Inadequate Water and Sanitation in Health Care Facilities in Eastern and Southern Africa(Washington, DC: World Bank, 2024-02-21)In Sub-Saharan Africa, health care facilities face critical challenges in water supply, sanitation, and hygiene services; health care waste management; and environmental cleanliness. With coverage below 50 percent, these deficiencies pose significant health risks to patients and health care workers, contributing to health care–associated infections. Meta-analyses and individual studies estimate rates of health care–associated infections in Sub-Saharan Africa at between 13 and 30 percent of hospital admissions, impacting patients, families, and health care providers. Rising antimicrobial resistance further exacerbates health outcomes and costs. In Eastern and Southern Africa, an estimated 3.1 million health care–associated infections in 2022 incurred over 320,000 excess deaths, costing at least US$6 billion, or 1.14 percent of combined gross domestic product in 2022. Investing in comprehensive water supply, sanitation, and hygiene and health care waste management can yield substantial benefits, with a benefit-cost ratio of 5.8 for all economic costs. Beyond preventing health care–associated infections, improved cleanliness and infrastructure are crucial for patient satisfaction, impacting future health care–seeking behavior and health care worker job satisfaction. Sub-Saharan African countries should prioritize infrastructure investment, budget allocation, staffing, and behavioral improvements to enhance the quality of health care and mitigate these pressing challenges.