AccLabPY

31/10/2022

Formalization of employment 

This activity is framed within the frontier challenge "Employment formalization", since the learning cycle aims to identify strategies to motivate the enrollment of domestic workers in the social security system, reducing the investment of time and effort required by employers to register their domestic workers in the social security in Paraguay (IPS).

The original learning question of our action learning plan is: how can we increase access to social security and improve the economic and physical security of employment in Paraguay's informal economy, particularly for women and in the recycling, construction, domestic work, and apparel industries?

Public sector: Ministerio de Trabajo, Empleo y Seguridad Social (Ministry of Labor), International Labour Organization (ILO). Private sector/civil society: Social clubs (Club Centenario and Club Internacional de Tenis)  Cooperatives (Cooperativa COOMECIPAR)

Assess how a personalized advice service offered by the Ministry of Labor and the awareness strategy on domestic work directed to employers, can influence the increase in the registration of domestic workers in social security.

The hypothesis that supports the intervention is that active advisory service to employers on current regulations, requirements, obligations, rights, benefits, and registration procedures for domestic workers to social security increases the formalization of employment. The experimental intervention was designed to influence he degree of knowledge that employers have about labor regulations and formalization procedures, through an active and personalized advsory service that, together with an awareness strategy to revalue domestic work, allows employers to prioritize formal social security strategies and encourage their proactivity to increase the registration of their domestic workers  to social security.

Design an advisory telephone-based service for employers to learn more and understand better the procedures to register their domestic workers into the Social Security System of Paraguay, to formalize their employment. Subscribe employers to the service for a 1 month period. Observe their user experience with the service, collect administrative records to evaluate how advanced in formalizing their employees they are, and survey them on their knowledge and perceptions of formalization at the end of the process. 

Employers and potential employers of paid domestic workers

We analyze the knowledge and perceptions about the social security of employers interested in accessing information and advice on the procedures for registering their domestic workers for social security. The participants voluntarily agreed to participate in the intervention through a registration form that included basic variables such as: contact information (cell phone and e-mail), if the interested person had a history of hiring domestic workers and questions about their experience with the registration procedures in the social security system in Paraguay (IPS). The registration form was distributed within the following organizations: Cooperativa COOMECIPAR, Club Centenario and Club Internacional de Tenis (CIT). To achieve coordination with these civil society organizations, collaboration and cooperation agreements were signed during the intervention period. We use simple random sampling (randomized control trial) to randomly defined two subgroups of the target population to determine the control (Group 1) and treatment groups (Group 2). The random selection allowed us to establish two subgroups of balanced participants with respect to the main sociodemographic characteristics collected with the registration form. The resulting randomization assigned a total of 75 participants to the control group and 76 participants to the treatment group. To observe the effects of the intervention, we designed a survey to measure the knowledge and perceptions about the social security and labor rights of domestic workers that employers have. This survey also captures if the registration of the domestic workers to the IPS was effective. To collect all this information, the survey was divided into three sections. The first section included questions to measure whether the intervention made it possible to start the registration procedures for domestic workers in the IPS, the level of progress in the registration procedures, and/or the reasons that have prevented the progress of registration in the IPS. Secondly, we propose questions to measure whether the intervention generated changes in the degree of knowledge about labor rights of domestic workers and registration procedures for IPS in the employers. Finally, the third section was designed to observe changes generated by the intervention in the perception that employers have regarding the work performed by paid domestic workers. The instrument was applied to the 151 participants registered for the intervention (75 in the control group and 76 in the treatment group). 

1 month

Approximately 20% of the time of our Head of Experimentation, 20% of the time of our Head of Solutions Mapping, 20% of the time of our Head of Exploration, plus 100% [CM1] of the time of three people hired for the learning cycle on formalization, was dedicated to the design, management, analysis, reporting, and monitoring of results, throughout the duration of the intervention. Moreover, the lab also counted with the help of a Research Associate, who devoted over 50% of her time to both implementation and analysis of the experiment. And we also hired a consultant to articulate our relationship with the private sector and civil society allies, with the goal of subscribing more employers into the prototyped advising service.

To measure the impact of the intervention, we created indices according to the questions included in the evaluation survey based on three central aspects: 1) the registration process, 2) the knowledge about regulations and rights related to paid domestic work, and 3) the perceptions that employers have on paid domestic work. These indices are used to verify whether there are significant differences in the average responses provided by the participants in the control and treatment groups. To measure the effects generated by the intervention, we estimated the differences between the control group and the treatment group using the Ordinary Least Squares (OLS) estimator. We found no significant effects on the degree of formalization of domestic workers as a result of the intervention, since the differences observed in the average values ​​between the control and treatment groups are not statistically significant. Both the control and treatment group participants received all the necessary information about the regulations of paid domestic work and the IPS registration procedures for domestic workers. The difference between the group control is that treatment group participants were also contacted individually, and they were constantly supported to resolve any doubts that might arise in the registration procedures for three weeks.

The participants of the intervention voluntarily agreed to participate, hence, those who registered, self-selected to participate in the intervention due to a previous interest in obtaining information about the registration procedures and the potential interest in registering their domestic workers in IPS. Therefore, the interpretation of the results obtained must consider that they are employers who have previous motivations to find out about regulations and procedures for registering paid domestic work. As a consequence, the results of the intervention represent the behavior of a group of employers who, due to their socioeconomic profile, are characterized by having a certain potential for the registration of domestic workers in IPS. Thus, the results cannot be extrapolated to other population groups that present different characteristics from those identified in this study. One aspect that could be improved in the intervention is to expand the focus to other types of employers, with other socioeconomic profiles, that is, to have a more comprehensive sample to be able to draw more general conclusions that do not adjust only to a particular group of the population.

6 months

For evaluation purposes only:  1. Protocol of the advisory service ~ $5000 2. Advisers who provided the service ~ $3000 3. Intervention Assistant ~ $2500 4. Comms ~ $3000 5.  Other resources: time invested by AccLab Members (average or 2h-4h/week over the full period of the pilot), full-time commitment of three people hired for the formalization project, time spent by officials from the Ministry of Labor for the intervention.

Because of the positive assessment of the service by employers, and despite it not leading straight to an increase in Social Security registrations, we are adapting and improving the advising intervention to transfer it into a different sector, within the framework of a Poverty Innovation Funding Window (PIFW) follow up project to our Formalization Laboratory. 

In the new iteration, under the PIFW project, it will be based on a program called “MiPyme Cumple”, which offers a wide range of advising support to SMEs on topics related to formalization. This will be combined with reflection-oriented workshops on labor rights and productivity advise, all oriented towards SMEs that have informal employment. 

We find that there is a positive assessment of the advisory service, especially on the provision of the paperwork documentation needed to register a domestic worker in IPS. We also find that the participants have a low level of knowledge on the specific regulations on domestic work. With this intervention, we also identify that the bureaucratic barriers limited the intention of employer to formalize their domestic workers, suggesting that centralizing and improving the information regarding IPS registration could help to avoid the information loss. Similarly, we learnt that digitalization and virtuality in the registration processes should be a next step to encourage the entry of domestic workers to the social security system. 

During the implementation and evaluation of the experimentation, we face external factors that negatively affected the process: a) the experimentation took place at the end of the year, so it was affected by the lack of time of the participants and the difficulty in capturing their interest and attention. b) the short application time of the advisory service did not allow a time for the assimilation of the information that would lead to action. c) climatic factors such as storms that left several participants without WhatsApp connection for one or two days.

The Inclusive Development Portfolio of our CO also focuses on some activities related to employment formalization and our findings could help to shape and design new projects and activities oriented to reduce the barriers to formalization in some industries such as construction, domestic work, among others.

1. The Ministry of Labor can benefit from the results obtained, since the findings show that offering an advisory service to employers, can change the perception that they have about social security for domestic workers. 2. Employers who receive the advisory service could improve their knowledge about social security and labor rights for domestic workers. Domestic workers who provide their services to employers that receive the advisory service. 

No, this experiment did not require iterations.

Choose another period for the intervention: due to logistical and administrative issues, our intervention took place in December 2021, a difficult month to capture the time and attention of the participants. Include more employer profiles: this will allow the analysis to consider a wider variety of profiles that hire domestic workers and cover more dimensions of the reality of informality in this sector.

Yes, the experiment can be used in any other sector with a high rate of informality. The idea of ​​offering an active advisory service to employers who have decision-making power may be crucial to increase the chances of registering workers in the social security.

Both sensing and exploration activities influenced greatly the design of the experiment, the hypotheses we decided to test, the places and people we engaged, and the things we needed to observe as the experiment unfolded. The activities designed as a part of the mapping and exploration phases, make it possible to made it possible to know in depth the needs of the actors involved, so that the experimentation was fully based on the findings of these phases.

Considering the limitations in terms of time and resources, it was surprising that we finally got 151 people to subscribe to the pilot service. Our goal was higher, but our expectation was lower, and therefore, getting this number of participants was surprising for us.