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OECD Development Policy Papers

The OECD Strategy on Development aims to strengthen the Organisation’s contributions to inclusive and sustainable growth in a wide array of countries. It draws on OECD’s evidence-based approaches, policy dialogue and knowledge sharing to improve policy making and economic reform. This strategy identifies four interlinked thematic areas: innovative and sustainable sources of growth; mobilisation of resources for development; governance for sustainable development; and measuring progress for development. Designed for a wide readership, the OECD Development Policy Papers are intended to stimulate discussion and analysis on these topics.

English, French

Increasing social insurance coverage in Viet Nam’s SMEs

Viet Nam has made significant progress in expanding social insurance coverage in recent years. However, coverage amongst small and medium-sized enterprises (SMEs) remains very low and very few workers in this sector are expected to receive a pension in retirement. Drawing on two datasets for SMEs in Viet Nam, this paper seeks to explain this phenomenon by examining the characteristics of enterprises that are enrolled and those that opt out, and it identifies possible barriers to enrolment, such as high contribution rates. It also examines how enforcement mechanisms and formalisation policies might deter enterprises from enrolling. Drawing on lessons from international experience, the paper recommends a series of policy responses that seek both to address these barriers and to protect the livelihoods of those workers who are not yet covered.

English

Keywords: formalisation, Viet Nam, social protection, social insurance, SMEs, minimum wage
JEL: I38: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs; H24: Public Economics / Taxation, Subsidies, and Revenue / Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes; J32: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions; H55: Public Economics / National Government Expenditures and Related Policies / Social Security and Public Pensions
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