False Starts, Wrong Turns, and Dead Ends. How (Not) to Ensure Social Protection for All Workers

Abstract

Given that the self-employed, and especially gig workers, are less eligible for a range of social benefits and are at a higher risk of poverty, it is welcome that the European Pillar of Social Rights has called for the right to adequate social protection to be extended to all workers. Nevertheless, self-employment also poses challenges for public policy. As a result, the question is how to integrate the self-employed into social protection (which is necessary if the goal is to avoid gaps in coverage), without actively encouraging self-employment (which might be undesirable on economic and social grounds). This chapter discusses two reasons policymakers should be wary of self-employment: limited job creation potential and perverse tax compliance incentives. It then shows how the relative weight of self-employment and gig work varies across countries and over time. In addition, it examines two questions that need to be answered for social rights to be extended to the self-employed: the appropriate social contribution rate, and the range of social risks covered. The chapter critically reviews two diverging national approaches to the integration of self-employed workers into social protection, as revealed by recent developments in the Netherlands and Greece. It concludes by tracing a possible way forward.