Perception and Willingness to Participate in Social Security Insurance by the Informal Sector: A Case Study of Commercial Drivers in the Kumasi Metropolis

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October, 2016
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Social security insurance policy is an essential mechanism for a sustainable poverty eradication and development. The state-based pension scheme in Ghana tends to be better adapted to formal conditions and this limits the participation of majority of the populace, especially those in the informal sector. This study sought to investigate organised commercial drivers' perception and willingness to participate in informal social security insurance in the Kumasi Metropolis. Specifically, the study examined the drivers' knowledge and perceptions on social security insurance policy, analysed the extent to which their socioeconomic characteristics and perception influence their willingness to participate in the social security insurance scheme, and the constraints to participation. Cross-sectional data on 300 drivers were collected using survey questionnaire for the study. Descriptive statistics such as frequency and percentages, graphs and pie chart were used to summarise the socioeconomic characteristics of the drivers and the constraints to their participation in social security insurance scheme. The knowledge and perception of the drivers were analysed using frequency and percentages and a three point likert scale. The determinants to participation in social security insurance scheme were analysed using the logit/logistic model. The study found that majority of the drivers have heard, are aware and understand the importance of social security insurance scheme for socioeconomic development of the nation. The participants agree and consider social security insurance as a good policy for socioeconomic development of society in general. The personal characteristics of the drivers such as marital status and their perceptions about the insurance scheme have influence on their willingness to participate in the social security scheme. The respondents' low confidence in the scheme among other constraints, may negatively affect participation and sustenance of the scheme. Based on the findings of the study, it is recommended that programmes aimed at encouraging the participation of the informal sector, particularly commercial drivers, in the social security insurance scheme should consider the socioeconomic characteristics of the heterogeneous people and their perceptions about the policy. Policy efforts by the government and other stakeholders (such as private insurance firms) toward improving the communication, visibility and availability of the insurance scheme to the informal sector are crucial for increased participation, performance and sustenance of the social security scheme in Ghana.
A Dissertation submitted to the Department of Economics, Kwame Nkrumah University of Science and Technology, in partial fulfillment of the requirements for the Award of Master's Degree of Science in Economics,