Promoting Informal Workers’ access to the Lao Social Security Fund
Promoting Informal Workers’ access to the Lao Social Security Fund
Introduction
This participatory research has two objectives: firstly, to build the capacity of Oxfam’s partners on data collection and to improve their knowledge about the Voluntary Social Security (VSS) scheme; and secondly to inform a research report titled “Promoting Informal Workers’ Access to the Lao National Social Security Fund”. The data collection team was comprised of officials from national and sub-national levels, mainly from the Lao Federation for Trade Unions, Labour and Social Welfare, the Social Security Organization, the National Health Insurance Bureau and the Office for Community Based Health Insurance. The field work took place during November and December 2020 in four selected areas: Bokeo, Champassak, Vientiane Capital and Luang Prabang. The team interviewed staff from five national and international organizations in Vientiane, sixteen provincial organizations, and eight district organizations. The team also conducted six focus group discussions in four provincial capitals to allow an open discussion with 26 members of the voluntary scheme; the same participants also provided individual feedback and information during key informant interview sessions. In addition to that, data of 234 informal workers from both provincial capitals and other towns was collected. These 234 participants were also informed about the benefits of the VSS, policies, terms and conditions.
This process was performed through face-to-face meetings during the course of which the interviewees were asked about their interest to join the LSSF. The current research builds upon experiences of a 2019 study conducted by the Lao-Japan Institute (LJI). Based on LJI’s experiences, the research team redefined the objectives of the study and the methodology for data collection and analysis, and expanded focal stakeholders to also cover the National Health Insurance / Community Based Health Insurance. In addition to the research findings, this report incorporates inputs from participants in a validation workshop organized on 25 February 2021.
Findings regarding existing Voluntary Social Security (VSS) members.
- Findings show a connection between the Lao Social Security Fund (LSSF) and the National Health Insurance Fund. In provincial capital areas that have access to voluntary scheme of LSSF, 35% of VSS members also have social insurance from other providers such as self-help groups, village funds, and insurance from private companies.
VSS members can be categorized into three groups: members that applied to the VSS on their own volition, members transferred from the formal sector, and those who became VSS members through the intervention of intermediaries such as civil society organizations and projects that support informal workers to access to social security. The shares of these groups in the sample are 54%, 38% and 8%, respectively.
- In the provincial capital, about 77% of VSS members reported being covered by the lowest insurance layer (LAK 99,000 per month). 83% pay their voluntary contribution monthly, and 8% report late payment. The VSS members who live more than 5 kilometres away from Social Security Office’s (SSO) branches tend to pay their contribution 3 months to one year in advance.
15% of the sampled VSS-members reported they were not aware of all seven groups of benefits provided by the VSS. 73% are aware of the health care benefits, but only 27% know about sick leave benefits. The VSS members that were ‘aware of all’ groups of VSS benefits, and have used its services, tend to report higher satisfaction scores compared to those given by the ones who are ‘not aware of any’ benefits.
Several challenges and limitations were mentioned by the VSS members. These include poor services at public health facilities, lack of information about VSS policies, and the that the process to claim the benefits is lengthy.
However, other than their perception of poor services and shortage of medicines, LSSF’s card holders also felt that they did not receive the same treatment than ordinary patients who pay cash for the services at public health facilities.
Findings regarding informal workers who are not members of the VSS.
Of the 234 non-VSS informal workers interviewed, 50% live in provincial capital areas, 56% were female, the average age was 40 years old, 85% are married, 90% have secondary education or lower, and 69% are self-employed or family workers. 55% have daily income, 20% have monthly income, and the average cash income is LAK 2.2 million per month. The 37% of the sample live on less than the national minimum wage. 75% of non-VSS informal workers reported that they had visited health facilities in the 12 months prior to the survey, or that a family member had visited a health facility within this time period. Provincial capital residents tend to visit provincial hospitals, private clinics and central hospitals; while non-provincial capital residents mostly relied on provincial hospitals, district hospitals and health centers. Those that used medical services recently reported a decent satisfaction score. On a scale of 1 to 5 (1 is lowest and 5 is highest), provincial hospitals were awarded an average score of 3.5-3.8 and health centers received an average score of 3.
60% of the respondents reportedly save money and assets (in cash, gold, land, livestock), to use those savings if required for an urgent need. The 37% of non-provincial capital and 42% of the provincial capital people also have access to loans.
The awareness about VSS among these informal workers is still limited. 47% of them heard only its name but were not aware of its characteristics or services; 34% reported that their understanding about the VSS is limited; 19% (24% in provincial capital and 13% in non-provincial capital) said that they have adequate knowledge of what VSS is and how it works.
During the interviews, the enumerators explained the VSS to the informants, allowed follow-up questions from them, and lastly asked them if they were interested to join the VSS. 93% confirmed that VSS scheme’s benefits are relevant and 85% were interested to join. The 15% that were not interested to join reported as reasons that they cannot afford to pay the full amount, or on a regular basis, that they don’t want to use poor health care services, or that they see themselves still young and healthy, and thus they do not see the need for these services.
Among the 234 informal workers, a small number are partially covered from the LSSF’s services through their spouses. 92% of them (23 out of 25) said that, nevertheless, they would like to have their own LSSF membership or would like to join the VSS by themselves, thus receiving access to the full package of benefits.
Of those that showed interest in joining the VSS, 82% chose the lowest contribution level (LAK 99,000 per month). 73% of people in provincial capital wanted to contribute monthly and 45% in non-provincial capital preferred to do advanced payments (of 3 months, 6 months or 12 months).
However, 60% of people in provincial capital and 52% of the non-provincial capital who were interested to join the VSS still had concerns. Those referred mainly to whether they would be able to meet payment deadlines, could go to LSSO for registration by themselves, filling the forms and the need to travel to the SSO offices in the provincial capital. Another concern was about the documents required by the SSO such as ID cards and family books. Some workers in the provincial capitals migrated in from other areas and therefore don’t have an updated documents, as well as newly married couples do not have their own family book yet.
A regression model (Probit Model with 2 sample groups and 3 specifications) was utilized to identify the factors that determine informal workers’ interest to join the VSS scheme. It was found that sex, age, marital status, income frequency, and residential areas of low-income informal workers significantly related to their interest to join VSS scheme. Among workers living below minimum wage, those interested in joining VSS are more likely to be female and married. Likewise, there is an inverted U-shape relation between the age of the informal workers in the sample and their interest in joining the VSS (the interest increase during young adulthood until adulthood, and then starts decreasing). Living in provincial capital or near a SSO office negatively correlated with interest in joining the VSS; this may be due to having better access to information on VSS services and benefits, and maybe linked to the existence of alternative providers to the SSO. Informal workers that are members of collective organizations (such as production groups, mass organizations funds, village funds and associations) are more likely to be interested in joining VSS. This is true only for the group of informal workers with income above the minimum wage.
- A simulation involving age and probability to identify those who might be interested in the VSS was performed based these results. It was found that the interest of informal workers on the VSS scheme increased from the early ages, it reaches its highest level at age 40 for low-income group and at age 42 years old for group of higher income and then starts to descend.