Decrease in transaction costs

42 Ecuador - The case of the Peasants Social Insurance

8. Ecuador - The case of the Peasants

Social Insurance Social security coverage in Ecuador is characterized by the relative importance of farming in the Ecuadorian labour market, and by the prominent role of the Peasants‘ Social Insurance SSC within the countrys social security infrastructure. This chapter aims at detailing the most important elements of the SSC, which is an innovative mechanism, intended to extend social security coverage to peasants, a group which is traditionally excluded. The first section establishes the main characteristics of the Ecuadorian Institute of Social Security IESS. The second part analyses Ecuadors farming population, its role within the labour market, and its main coverage indicators, since it is SSCs main beneficiary and raison dêtre . Lastly, we review the SSC concept through an institutional perspective, with the aim of showing its main characteristics.

8.1. Main characteristics of the Ecuadorian Social Security System

As established in the document Diagnosis of the social security system in Ecuador Durán-Valverde, 2008, the Ecuadorian social security system consists of the following institutions: a IESS, b Armed Forces Social Security Institute ISSFA, and c National Police Social Security Institute ISSPOL. These entities generate a group of typical social security programmes in the 9 branches of social security established by ILOs Convention n. º 102. The IESS is the countrys main social security institution, and it administers the following insurance and short term benefits: Peasants‘ Social Insurance health and old age pensions; individual and family health insurance prevention and recovery, including cash benefits; general work hazards insurance; general insurance for disability, old age, and life pensions; reserve funds; and the unemployment protection Fund, among other short term cash benefits. Within this portfolio of social protection and insurance, we highlight the SSC. With the support of ILO, Ecuadors Government is working on a draft social security system reform, which includes protection mechanisms which seek to move towards more universal coverage. The SSC is an essential aspect of the current social security system. This situation was consolidated in the new Political Constitution of Ecuador, in which the Institute and the SSC are the only institutions listed by name.

8.2. Participation of the farming population in the Ecuadorian labour market

The SSC‘s target population are self-employed farm workers, artisanal fishing workers, and their families. Due to its nature, this population resides in the countrys rural areas. According to the data of the 2005 Survey of Family Households, 48 per cent of working EAP workers is considered to be own-account workers. 42 per cent of all of this categorys workers are dedicated to activities of the primary sector of the economy see table 9.