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Social Security

What we do

The IDB plays a leading role in knowledge production on social security and is developing this as a major area of operational activity. Currently the IDB is preparing and executing operations to support the implementation of the recent Chilean Pension Reform, developing an information system to improve social security policy in Uruguay, and supporting greater institutional capacity in Brazil. The IDB is also leading two regional public goods projects with the aim of improving education on social security matters, and developing a regional information system on social security. The Bank is also developing a series of studies assessing the feasibility and cost of reaching universal pension coverage, on how to best design unemployment protection systems, and of the effects of social security financing on labor market outcomes in the region.


To support the production of knowledge and the design and implementation of programs and policies aimed at enhancing the coverage and sustainability of social security.

Why social security?

Social security systems in the region only cover a fraction of the labor force. On average, more than half of workers lack coverage of social security or other benefits for which registration in the national social security system is a pre requisite. A major share of population is not prepared to face the risks of poverty in old age, unemployment, or poor health.

Social security systems are often funded with labor taxes on formal employment. This arrangement affects the workings of the labor market and may in itself be a source of high informality. Many countries have created parallel programs to protect informal workers. While these programs provide some relief to those who lack social security, the coexistence of different types of programs creates important inequalities and distortions. Often, the poor pay for the social security of the well off. In addition, such combination of programs may lock workers into low-productivity jobs. Addressing such problems becomes increasingly urgent as populations age and more workers reach old age without a pension or protection against deteriorating health.

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