Transcript Migration and Portable Social Security Benefits

Social Protection for International Migrants
Access to and Portability of Social Security Benefits
Johannes Koettl
Human Development Network – Social Protection and Labor
Migration and Development Thematic Group BBL
December 14, 2006
Background
• Commissioned work for the GCIM on portability
•
(2005)
Recent work on social protection for migrants in
general
 Access to social services in host and home countries
 Portability of social security entitlements
• Portability: ability to preserve vested social
security entitlements and those in the process
of being vested, independent of nationality and
country of residence
2
Motivation I: guarantee social
protection of migrants
• Atypical life cycle of migrants requires special
provisions for their social protection
 Contribute to various systems
 Face distinctive vulnerabilities
• Return/Circular migration requires high degree
of portability to guarantee the social protection of
migrants
 Pre-WWI: 30% (Hatton and Williamson 1998)
 Balkans in first half of 20th century: between 50 and
90% (Sarris et al. 2004)
3
Turkey: Ratio of official outflows to inflows of Turkish
nationals for selected host countries (%)
Host Country
Austria
Belgium
Denmark
Germany
Netherlands
Switzerland
Total
1992
1993
1994
1995
1996
1997
22.2%
18.2%
50.0%
19.8%
54.7%
46.4%
24.0%
28.6%
67.1%
21.8%
62.5%
61.0%
22.2%
33.3%
72.6%
37.2%
78.9%
68.2%
24.0%
25.0%
58.7%
33.3%
71.1%
56.5%
20.0%
8.3%
59.4%
23.4%
73.5%
55.5%
35.7%
20.0%
82.1%
16.9%
79.3%
73.9%
1998
64.4%
25.0%
16.7%
94.0%
17.6%
88.5%
81.1%
1999
51.4%
27.3%
18.2%
86.8%
16.7%
50.0%
73.5%
2000
51.4%
14.3%
22.2%
79.4%
13.3%
46.4%
67.2%
2001 Accumulated
45.5%
52.5%
10.0%
21.5%
22.2%
20.0%
65.8%
69.4%
21.8%
35.5%
63.7%
59.2%
63.0%
Source: OECD 2003.
4
60 to 90 percent of youth in developing countries have a strong
desire to migrate temporarily, if the legal opportunities were
there, but only 23 percent would move permanently
5
Return rates of youth migrants are high; average
Mexican youth migrant returns at age 24, after 3 years
abroad; (Albania: 25 after 7 months)
6
Source: McKenzie 2006
Motivation II: impact on home
and host countries
• Home countries
 Lack of portability as an obstacle to return migration
 Fiscal implications for social security systems of home countries
• Host countries
 Political expediency of stressing temporary nature of immigration
 Encourage participation of migrants in the formal sector
• Enhancing portability as a means




to encourage participation in the formal sector
to reduce incentives for undocumented migration
to improve social protection of migrants and their dependents
to encourage return migration
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Main findings and roadmap
• Main findings
 Only about 20 percent of migrants worldwide
benefit from full portability (mainly North-North
migrants)
 Bilateral social security agreements are current
best practice
• Roadmap
 Numbers
 Main issues and current best practice (pension
and healthcare)
 Conclusion and operational relevance
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Portability Regimes
I.
Access to social security benefits and advanced
portability regulated by bilateral agreements
II.
Access to social security benefits in the absence of
bilateral agreements
III.
No access to portable social security benefits
IV. Undocumented migrants who participate in the
informal sector of the host country
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Portability regimes globally: official and undocumented
foreign nationals residing in region in 2000 (%)
Regime
Africa
Asia
Europe
Latin America
North America
Oceania
World
I
1.7
0.3
47.2
36.3
16.3
39.1
21.2
II
78.3
61.2
32.8
43.7
58.5
40.9
52.0
III
0.0
18.5
0.0
0.0
0.0
0.0
5.5
IV
20.0
20.0
20.0
20.0
25.3
20.0
21.3
Total
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Source: Harrison 2004, ILO 2005a, Lowell 2002, Passel 2005, and authors’ calculations.
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Portability regimes globally: official and undocumented
nationals from region residing abroad in 2000 (%)
Regime
Africa
Asia
Europe
Latin America
North America
Oceania
World
I
8.9
6.6
47.7
3.7
64.9
57.5
21.2
II
64.3
58.5
35.6
64.1
35.1
42.5
52.0
III
4.2
12.3
1.2
0.0
0.0
0.0
5.5
IV
22.6
22.6
15.5
32.2
0
0
21.3
Total
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Source: Harrison 2004, ILO 2005a, Lowell 2002, Passel 2005, and authors’ calculations.
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Global stocks of official migrants (thousands)
and bilateral social security agreements
Region
Africa
Asia
Europe Latin America North America Oceania Unallocated World
Number of foreign nationals in region
Percentage of global stock
12,165
8.4%
41,131
28.3%
47,931
33.0%
5,807
4.0%
32,626
22.5%
5,490
3.8%
n.a. 145,150
n.a. 100.0%
Number of nationals from region abroad
Percentage of global stock
Accumulated number of agreements per
(i)
country
16,830
11.6%
49,286
34.0%
48,914
33.7%
18,349
12.6%
2,340
1.6%
963
0.7%
8,470 145,150
5.8% 100.0%
342
121
2,561
260
277
95
n.a.
3,656
(i) Numbers refer to bilateral social security agreements per region, including all additional protocols and modifications to previous agreements. Since every
agreement has two signatory states, worldwide every bilateral agreement is counted twice (although the two signatory states might very well be located in two
different regions). The total number of agreements worldwide is therefore half of 3,656, that is 1,828.
Note: n.a. for no information is available.
Source: Harrison 2004 and authors’ calculations.
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Main gaps in current provisions
and best practice
• Objective I: no benefit disadvantage with
regard to pension and healthcare for
migrants
• Objective II: actuarial fairness
• Objective III: bureaucratic effectiveness
13
Main gaps and best practice: pensions
• Limited exportability
 Some countries don’t allow for exportability or
apply reductions
• Best practice: unilaterally change national social
security law
 Proof of life for old-age and survivor pension
• Best practice: allow for proof of life at consulates or
social security administration in home country
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Main gaps and best practice: pensions
• Absence of totalization
 migrants might not meet qualification requirements
 reduced replacement rates
 Best practice:
• Opting out for temporary migrants
 Drawback: no contribution from employer, purchasing power,
healthcare
• Lump sum payments
 Drawback: loss of employer’s contribution, lack of annuity market in
home country
• Bilateral social security agreements
 Full totalization
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Main gaps and best practice: pensions
• Other issues
 Multitude of agreements
• Best practice
 EU 1408/1971 and 883/2004
 Euro-Mediterranean Agreements with Maghreb countries
 ILO Convention 157 (1982)
 Double coverage for expatriates
 Fake SSA accounts
• US$400bn in unclaimed accounts
• About US$35bn from Mexican migrants
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Gaps and best practice: healthcare
• Insufficient access to public healthcare
 No access if no employment or pension
 Absence of totalization
• Medicare not subject to totalization
 Best practice
•
•
•
•
Unilaterally: reimbursements
Private health insurance
Voluntary contributions to public health system
Bilateral agreements
 Totalize periods of contribution
 Ensure continued coverage
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Gaps and best practice: healthcare
• Actuarial considerations
 No cost sharing between countries
 Financial drain for developing countries
 Best practice:
• Not even within EU fully addressed
• Under certain circumstances annual transfers
between health systems
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Conclusions
• Majority of migrants face obstacles with
regard to portability of benefits
• Bilateral social security agreements are
current best practice
• Beyond current best practice, more
actuarial structures might improve
portability
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Operational relevance
• Concerns of client countries with large diasporas
 Social protection of their citizens
 Fiscal implications for their social security systems
• Labor market integration in south-south
migration context
 Harmonize social security systems to ensure
portability
• Pre-deployment training for migrants
 Inform migrants about their social rights
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