The International Labour Organization (ILO) estimates that more than 2 billion workers worldwide are in informal employment, accounting for 57.8 per cent of the global labour force. Currently, only about 52.4 per cent of the global population is covered by at least one social protection benefit, leaving around 3.8 billion people without protection. This report analyses the practices and challenges of China, Kenya, and the Lao People’s Democratic Republic in expanding social protection coverage to workers in the informal economy.

Introduction

Informal workers often lack institutional support when facing risks such as illness, unemployment, and old age, allowing poverty to persist across generations. The global community aims to realise universal social protection under the 2030 Agenda for Sustainable Development. While China has significantly expanded coverage in recent decades, Kenya and the Lao People’s Democratic Republic grapple with larger informal economies and more limited fiscal space. The annual financing gap for achieving universal social protection floors in low- and middle-income countries is estimated at approximately US$1.4 trillion.

China: practice and experience

China has evolved from a narrow work-unit-based model to a phase of near-universal coverage. By the end of 2024, 1.07 billion people participated in basic old-age insurance schemes, including 530 million in the employee scheme and 540 million in the urban and rural resident scheme. Basic medical insurance coverage remains above 95 per cent, reaching 1.33 billion people. China utilise a dual-track arrangement where workers can voluntarily enrol in individual capacity schemes or subsidised resident schemes. For 2025, the per capita fiscal subsidy for resident medical insurance reached no less than 700 yuan.

Innovative pilots have been launched to address emerging risks in new forms of employment. By October 2025, a pilot occupational injury protection programme for platform workers covered 23.25 million individuals across 17 provincial-level regions and 11 platform companies. Digitalisation has been central to these efforts; by the end of 2025, 1.39 billion physical social security cards were issued nationwide, with over 1.1 billion electronic cards activated. These digital platforms facilitate registration, contribution payment, and cross-regional portability for a highly mobile workforce.

Kenya: practice and challenges

Kenya is a lower-middle-income country where informal sector employment reached about 17.4 million people in 2024, accounting for roughly 84 per cent of total employment. The Kenya Social Protection Policy (2023) defines four pillars: income security, social health protection, shock-responsive social protection, and complementary programmes. The National Safety Net Programme currently reaches approximately 1.7 million beneficiary households. For contributory protection, the National Social Security Fund (NSSF) launched ‘Haba Haba’ in 2019, a flexible mobile savings arrangement designed for informal and self-employed workers.

Health protection reform is a significant priority through the Social Health Insurance Act (2023), which established the Social Health Authority (SHA). However, only 26.3 per cent of households possessed any form of health insurance according to 2022 data. Challenges include affordability, continuity of contributions, and public trust. The system increasingly leverages mobile financial technology, such as M-PESA, to reduce transaction costs and allow for small, flexible contributions compatible with the volatile incomes of informal workers.

Lao People’s Democratic Republic: practice and challenges

In the Lao People’s Democratic Republic, 81 per cent of the non-civil servant workforce, or 1.17 million workers, are in informal employment. The National Social Protection Strategy: Vision 2030 – Goal 2025 organises protection around health insurance, social security, and social welfare. As of December 2025, the Lao NSSF benefit package covered 921,995 people. Coverage remains concentrated in the public sector, with only 43,329 self-employed workers included. To improve accessibility, the government has piloted Mobile Social Security Offices and launched its first social security mobile application in December 2025, supporting digital access to accounts and benefit information.

Comparison of China, Kenya and the Lao People’s Democratic Republic

China possesses a significantly larger fiscal capacity, with a GDP of US$18.7 trillion and a GDP per capita of US$13,000, compared to Kenya and the Lao People’s Democratic Republic. While China focuses on adapting institutions to population ageing and new employment forms, Kenya and Lao PDR face higher poverty rates and greater agricultural employment. Kenya’s developed financial ecosystem provides favourable conditions for mobile payment innovations, whereas China utilises unified national platforms. Key lessons for further expansion include setting realistic universal goals, establishing multi-tiered systems, and using fiscal leverage to encourage participation.

Conclusion

Expanding social security in the informal economy requires firm political commitment and well-layered institutional design. Economic development and coverage expansion are mutually reinforcing; higher income levels provide resources for protection, which enhances social stability and human capital. There is no single model for expansion; instead, countries should adapt external experiences to local realities. Future progress will depend on advancing through pilot programmes, strengthening legal enforcement, and improving administrative efficiency through continuous digital transformation.