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MORE AND BETTER JOBS IN SOUTH ASIA
increasing compliance, and influencing the more general policy debate. Workers covered under one form of formal protection tend to be covered under others, but most workers have no coverage at all. This duality is illustrated in table 6.1, which presents simple correlation coefficients for social security coverage, trade union membership, and employment in workplaces of 10 or more employees (as a proxy for coverage through labor laws) in India. As the matrix shows, all of these indicators of formal social protection are positively correlated, with statistically significant coefficients. There are strong associations between access to formal instruments on the one hand and poverty and overall welfare on the other. The poverty rate for wage workers with social security is much lower than the rate for workers who are not covered (4 percent versus 24 percent in India in 2005; 3 percent versus 29 percent in Nepal in 2003/04). The poverty rate for nonunion workers (22 percent) in India was more than twice the rate for union members (10 percent) in 2010. In Sri Lanka, nearly one-third of the workers covered by the employment protection law come from the richest quintile of the population (Heltberg and Vodopivec 2004). Earnings are higher for workers with access to social security or employment protection.7 Although these correlations may in part reflect the effectiveness of formal instruments in helping workers manage risk, they
TABLE 6.1 Correlation coefficients among union membership, social security coverage, and employment in firms with 10 or more employees, India, 2010 Union membership Union membership Access to social security Firm size of 10 or more workers
1.00 0.51a 0.19a
Access to social security 1.00 0.42a
Firm size of 10 or more workers 1.00
Source: Authors, based on data from the 2009/10 National Sample Survey. Note: Social security coverage includes pensions and provident funds only. Union membership includes registered trade unions, memberships in associations of owners, and self-employed workers. It is not possible to isolate trade union membership. a. Pearson correlation coefficient significant at the 1 percent level.
also reflect the greater likelihood of highproductivity workers fi nding jobs that offer protection. In India and Sri Lanka, workers with higher levels of education are more likely to hold jobs that provide formal protection; young, old, and less educated workers are less likely to hold such jobs (table 6.2). The higher coverage of women in Sri Lanka likely reflects the high degree of selection of more educated women into better jobs.
Protection of workers’ fundamental rights Labor laws play an important role in protecting the fundamental rights of workers. The core labor standards, reflected in the International Labour Organization (ILO) 1998 Declaration on Fundamental Principles and Rights at Work, represent an internationally agreed upon group of basic rights relevant regardless of the level of development.8 The declaration covers four principles and rights, each covered by two ILO conventions: • Freedom of association and the effective recognition of the right to collective bargaining • Elimination of all forms of forced or compulsory labor • Effective abolition of child labor • Elimination of discrimination in respect of employment and occupation. Ratification of the eight core conventions does not by itself imply implementation, but it does signal political will. As such, it is a useful metric by which to assess countries’ commitment to protecting basic worker rights. Ratification of the core conventions in South Asia has been only partial. Pakistan and Sri Lanka ratified all of the conventions associated with the core labor standards (table 6.3). The other countries in the region (excluding Bhutan, which is not a member of the ILO, and Maldives, which became an ILO member only in 2009) have ratified some but not all standards. The conventions on freedom of association and collective bargaining and on abolition of child labor have