Forces disrupting markets and changing the nature of work present a fundamental challenge to prevailing employment-based risk-sharing policies in countries at all levels of development. These forces are diversifying the ways people earn their livelihoods. Work in low- and middle-income countries has always been diverse, fluid, and overwhelmingly informal: unobservable and beyond the reach of the state’s ability to enforce the obligations and benefits of a country’s social contract.
In contrast to this diversity and fluidity, prevailing employment-based risk-sharing policies assume a level of homogeneity and stability in the ways people work that reflects the reality of only a minority of workers in these countries. More recently, the assumed homogeneity and stability of work has changed even in the high-income countries where these policies were conceived of and developed. Both these situations raise concerns that current risk-sharing policies are losing relevance for working people.
The changing nature of work challenges the assumptions underpinning the policy tools for managing risk and uncertainty, which have for the most part remained built around the assumption that most people are in a stable, “standard” employment relationship.