Collective Registration Innovative mechanisms in independent workers coverage

Innovations in extending social insurance coverage to independent workers 33

7. Costa Rica

– Best practice in adapting social insurance to independent workers It is widely acknowledged that job insecurity, income irregularity, a high heterogeneity among groups, a low organization level, a low or null contributory capacity, competitive vulnerability, the permanent struggle for company survival, and mistrust regarding social security institutions are structural features of integrating independent workers into the labour market. Although being external to social security, such features historically hinder the registration of many of these workers in Latin Americas social security schemes. Nevertheless, there is a consensus in the region regarding the fact that the high percentage of independent work which is currently excluded from social security could be significantly lower should the administrative and programmatic configurations, internally established by social security institutions, be better adapted to the needs and characteristics of independent workers, and not respond only to the peculiarities of the modern urban sectors employed workers, which in Latin America are a decreasing minority of the workforce in relative terms. Given that within the Latin-American context Costa Rica has enjoyed relative success in increasing social security coverage levels for the self-employed population, the below described experience of the Costa Rican Social Insurance Fund, in spite of the challenges it still faces, provides a clear example that, with effort and an innovative spirit, a social security institution make significant progress in what is admittedly a complex procedure of adaptation and inclusion of the groups most in need of social protection. In the path to building socially inclusive societies, which are more cohesive and prosperous, we expect that the experience shared herein may be capitalized upon by other countries as a method to gauge appropriate solutions to respond to the challenge of integrating the large majorities excluded from social security institutions.

7.1. Genesis of best practices of independent workers social protection

In Costa Rica, independent work is the second most important way of entering the labour market. For every ten active workers, around three work independently 1 . According to the national survey made of family households in the year 2009, the population linked to this type of work reached 371,000 people, of which 70.4 per cent 267,000 people were covered by health social insurance, and enjoyed the same protection scheme applicable to employed workers. As described below, the lessons of the Costa Rican experience related to this significant level of coverage of independent workers are drawn from a study of the revision of the social security model designed between the 1940s and 2010. The stated intention of ensuring social protection to independent workers goes back to 1941, when the Costa Rican Social Insurance Fund CCSS was created under Law n. º 17, 1 This proportion has been relatively stable over the past three decades, a period in which the economy underwent a profound structural transformation, which was marked by the transition from a model based on agro exports and on focusing on few products, to a diversified model directed to the industry, tourist services, and trade, together with a growing participation of women in all professional categories.