Lao Govt Set to Expand Social Security Coverage for Informal Workers and Self-Employed

The International Labour Organization (ILO) conducted these studies in partnership with Women in Informal Employment: Globalizing and Organizing (WIEGO).

The Lao government is set to enhance social security coverage for informal workers and the self-employed through the National Social Security Fund (NSSF). This follows the release of two studies offering insights and actionable recommendations for broadening access to social protection. The International Labour Organization (ILO) conducted these studies in partnership with Women in Informal Employment: Globalizing and Organizing (WIEGO).

The ILO’s report, “Understanding Informality and Expanding Social Security Coverage in the Lao People’s Democratic Republic,” and the Policy Brief, “Improving Home-Based Workers’ Access to Social Security in Vientiane Capital, Lao PDR,” underline the importance of improving worker outreach and the quality of healthcare benefits under the NSSF to address persistently low enrolment rates. Currently, only 7.6% of members are enrolled voluntarily, despite the system’s competitive benefits and broad legislative framework.

Challenges and Recommendations for Informal Workers

Informal workers make up 86.4% of the workforce in Lao PDR, equating to approximately 2.14 million people. However, limited awareness of the NSSF’s benefits, financial constraints, and a perception of inadequate healthcare services have hindered greater participation.

“The NSSF offers substantial value for workers and enterprises, but better outreach and coordination across government sectors are essential to improve enrolment,” said Loveleen De, Social Protection Program Manager at the ILO. She added that measures such as linking business licenses and tax incentives with social security registration, improving compliance inspections, and enforcing regulations could increase participation.

Additionally, the studies highlight barriers faced by home-based workers, including irregular incomes, difficulties in navigating registration processes, and limited access to reliable payment methods.

“Our discussions revealed that many workers were unaware of the NSSF’s comparative advantages over private insurance, particularly its cost-effectiveness and range of benefits,” said Aura Sevilla, Policy Brief contributor from WIEGO. She emphasized the need for enhanced communication strategies to inform workers about the advantages of enrolling.

Strategic Vision and Implementation

Introduced in 2013 as part of the National Social Protection Strategy, voluntary NSSF coverage aims to ensure equitable, adequate, and sustainable access to basic social protection for all Lao citizens by 2030. To meet these goals, the studies recommend:

• Expanding healthcare services and improving their quality to boost enrolment and confidence in the scheme.
• Implementing targeted education campaigns to raise awareness of NSSF benefits.
• Simplifying the application and payment processes to make them more accessible to informal workers and those with irregular incomes.

Stakeholder Engagement and Policy Formulation

The findings and recommendations were presented during a workshop held in Vang Vieng from November 11–12, 2024, which gathered key stakeholders to discuss practical ways to integrate these recommendations into future policies. The event underscored the government’s commitment to increasing social security participation through multi-sectoral cooperation.

By addressing these challenges, the Lao government aims to bring a larger portion of its workforce under social protection, improving livelihoods and strengthening the social safety net for millions of its citizens. This aligns with the broader goals of economic development and inclusive growth.