Social security systems in Latin America and the Caribbean were built with one assumption in mind: that each person would eventually have a formal job, and that this job would be the insurance link for the individual and the members of his or her household.

Almost eight decades after the main social security system was founded, the reality is very different. More than half of active Mexican workers are informal, they are not permanent workers, and therefore access to basic insurance services is very limited. This situation is more critical for independent and low-income workers, since in 2020 less than 1% of these Mexican workers contributed to their pension.

This data makes us think: if the labor markets do not fit with the traditional social security model, can the security systems adapt to the reality of the labor market?

Read more about this interesting topic on the IDB Blog (only the Spanish version available).