Peru

Due to high levels of informality and low levels of social security coverage in Peru, most Peruvian workers are at high risk of losing their jobs and income during economic crises. This situation has worsened during the COVID-9 pandemic, and labour informality in the country now reaches 78% of workers.

The project Strengthening Social Protection in the Event of Unemployment in Peru was designed to establish an institutional mechanism for the implementation of a comprehensive social protection system that provides income security for unemployed workers and promotes their reintegration into the labour market, helping to close the social and gender inequality gaps exacerbated by the pandemic.

The project’s interventions have enabled Peru to have a proposal for the implementation of a comprehensive unemployment protection scheme designed to be integrated into the country’s social security structure. At the proposal of workers’ representatives, the government has initiated the administrative process for its institutionalisation through the ratification of Branch IV of the ILO Social Security (Minimum Standards) Convention, 1952 (No. 102), and the ILO Employment Promotion and Protection against Unemployment Convention, 1988 (No. 168). 

Key achievements in 2021-22

The social partners have developed a proposal for the creation of a comprehensive unemployment protection scheme that: 

• • is based on two components: the implementation of a Social Security for Unemployment (SSD) and the redesign and strengthening of the Active Labour Market Policies (PAMT);
  • draws on an universalisation approach towards the protection of the informal workers and people in a situation of social exclusion;
  • involves social dialogue and progressivity in its implementation;
  • promotes formalisation and decent work.

A study on the financial feasibility of Social Unemployment Insurance for Peru has been carried out.

• The study assesses the financial viability of an eight-year economic cycle for an unemployment social insurance through a system of individual contributions to a common fund (Unemployment Fund).

New institutional mechanism for the implementation of social protection against unemployment. 

• • Unemployment Social Security has been integrated into the priority objectives of the National Policy for Decent Employment in Peru approved in June 2021.
  • The Ministry of Labour and Employment Promotion has initiated the administrative process for the ratification of Branch IV on unemployment benefits of Convention No. 102 on Minimum Standards of Social Security and Convention No. 168 on Employment Promotion and Protection against Unemployment.

Increased and improved technical capacities of Peruvian government officials in social protection against unemployment.

• The project supported the creation of a multi-stakeholder working group, whose participants include senior Peruvian government officials. This group has discussed and agreed upon the dimensions of the proposal of social protection for formal workers in terms of beneficiary coverage, benefits, access conditions and financing. More than 60 meetings were held to facilitate the appropriation of the proposal by officials and strengthen their capacities for its promotion within the ministry. Training has also been provided on the ILO actuarial model for the determination of the unemployment contribution rate, as well as inputs for the preparation of administrative files for the institutional mechanisms mentioned above.

Resources

• Proposal for the development and implementation of the Comprehensive Unemployment Protection Scheme in Peru (March 2022) – in Spanish
• Report: Unemployment social insurance for Peru – Actuarial Valuation (2021) 
• Infographic: Strengthening social protection in the event of unemployment in Peru (Dec 2021) – in Spanish
• Infographic: Comprehensive proposal for social protection against unemployment for Peru (Dec 2021) – in Spanish

Events

Project partners

In Peru, the main national partners are the Ministry of Labour and Employment Promotion (Ministerio de Trabajo y Promoción del Empleo), together with the Ministry of Economy and other public entities and workers and employers’ organisations.

Contacts

Ms. Ana Gómez Narváez, ILO, National Project Coordinator, gomezan@ilo.org

Mr. Pablo Casalí, ILO, Social Protection Specialist, casali@ilo.org