Social Security Enrollment as an Indicator of State Fragility and Legitimacy: A Field Experiment in Maghreb Countries

Abstract

State legitimacy and effectiveness can be observed in the state’s approach to delivering welfare to citizens, thus mitigating social grievances and avoiding conflicts. Social security systems in the Maghreb countries are relatively similar in their architecture and aim to provide social insurance to all the workers in the labor market. However, they suffer from the same main problem: a low rate of enrollment of workers. Many workers (employees and self-employed) work informally without any social security coverage. The issue of whether informal jobs are chosen voluntarily by workers or as a strategy of last resort is controversial. Many authors recognize that the informal sector is heterogeneous and assume that it is made up of (1) workers who voluntarily choose it, and (2) others who are pushed into it because of entry barriers to the formal sector. The former assumption tells us much about state legitimacy/attractiveness, and the latter is used to inform state effectiveness in delivering welfare. Using the Sahwa survey and discrete choice models, this article confirms the heterogeneity of the informal labor market in three Maghreb countries: Algeria, Morocco, and Tunisia. Furthermore, this article highlights the profiles of workers who voluntarily choose informality, an aspect that is missing from previous studies. Finally, this article proposes policy recommendations in order to extend social security to informal workers and to include them in the formal labor market.

Keywords

• informal employment
• social security
• state effectiveness
• Maghreb countries
• individual preferences
• discrete choice model