Informality, Contributory and Non Contributory Programmes. Recent Reforms to the Social Protection System in Uruguay

GUILLERMO CRUCES; MARCELO BERGOLO

Development Policy Review

Overseas Development Institute

Año: 2013 vol. 31 p. 531 - 551

1467-7679

Several countries in Latin America are expanding their social protection systems. There is an on-going debate about the trade-offs implied by these expansions, and by the resulting interactions between contributory and non-contributory programmes with informality in the labour market. This study contributes to this discussion by analyzing the potential incentive effects for formal and informal employment from a set of social protection reforms implemented in Uruguay in the decades of 1990 and 2000. The study presents empirical evidence of a health insurance expansion to formal worker?s dependents, and finds that this reform significantly increased formal employment. Finally, the document discusses possible alternatives to extend social protection systems while maintaining incentives for formal work in Latin America´s labour markets.