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|Titre:||Don’t they care about their future? Or they are just unaware of social insurance? Forward-looking and demand for social insurance in Algeria|
Hammouda, Nacer E.
El Moudden, Claire
|Mots-clés:||demand for Social insurance|
knowledge of social security
|Date de publication:||2017|
|Résumé:||The aim of this paper is to understand the very low demand for social insurance in the private sector in Algeria. The Algerian social security system provides a package of social insurance for all categories of workers for protection against all social risks. However, according to the National Office of Statitiscs, 73% of workers in the private sector do not have any social security coverage. The theoretical background of the economy of insurance shows that individuals are not necessarily forward-looking, have high risk-tolerance, and tend to avoid buying insurance. Previous empirical studies have also shown that disregarding the future (by not being forwardlooking), level of education, financial literacy, and the knowledge that individuals have about social security could have an impact on the demand for social insurance. To test these hypotheses, these variables are measured using an experimental questionnaire. It was administered to 654 workers among the Algerian private sector workers. It was found that the workers have a very high rate of time discounting. The majority of individuals do not understand the social security system and have low financial literacy, even among those with a good education level. The logistic regression shows that individuals who have a higher disregard for the future are less likely to seek social insurance. Financial literacy does improve the demand for social insurance. Furthermore, individuals who have better understanding of the social security system are more likely to seek social insurance coverage. The paper will also present some suggestions to improve the current situation.|
|Appears in Collections:||Working Papers|
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