Phase I: Mapping Income Protection Gaps (2014/15)
The global population is ageing. Disability rates among working-age people have risen at the same time as public expenditure constraints tighten. Meanwhile, economic uncertainty and financial crises are corroding the economic growth rates that historically underpinned European state welfare systems, long considered the ideal towards which developing nations should aspire. Faced by pressure from financial markets, governments in developed countries reduce access to and levels of income protection in the teeth of political opposition. Protection against the risk of disability or premature death is increasingly a personal responsibility. IPGs emerge as impaired lives are marginalised - as much by precarious labour markets as by more limited state help. In developing states, primacy is given to protecting the poor: governments expect burgeoning middle classes to take care of themselves.
The first phase of the project is a global mapping exercise to assess what resources are available for households in the event of work incapacity or premature death. The resulting report outlines (1) how income is protected by governments; (2) why income protection gaps are set to increase as a global challenge; (3) the risks of these gaps; and (4) potential actions for governments and employers. It considers the varying situation in 18 countries across four broad geographical regions - Continental Europe, Latin America, the English-speaking world, and south Asia - to illustrate the different manifestations of IPG risks and the means by which they are compensated in different parts of the world.
Download phase I report | Income protection gaps: a rising global challenge | June 2016
Phase II: Scoping Income Protection Gaps: individual behaviour and risk perceptions (2015/16)
The second phase of the project investigates the behavioural biases of individuals in relation to demand for income protection insurance. We aim to understand the cognitive and contextual drivers motivating decisions to insure against unexpected losses in earned income. In Phase II, we are analysing the reasons for variation in demand for income protection insurance at the level of the individual wage earner. This includes awareness and knowledge of insurance products; socio-demographic factors; the role of personal experience of IPGs; financial literacy; willingness to pay; national institutional drivers; and trust in institutions.
In March 2016, in partnership with Epiphany RBC [link], we administered a survey of wage earners in 11 countries to gain deeper insight into all of these issues. With a response rate of over 11,000, we now have access to an extensive database which serves as the foundation for the academic and industry research outputs for Phase II. More information about the survey research methodology and research outputs. .
Download phase II report | Understanding income protection gaps: Awareness, Behaviour, choices | June 2017
Phase III: Closing the Income Protection Gap: Recommendations for Governments and Employers (2016/17)
The final phase of the project builds upon the insights accumulated from the first and second phases, drawing policy implications for governments and employers alike. It examines ways in which the private and public sector could work together to close income protection gaps. The final report published in October 2017 Embracing the Income Protection Gaps Challenge: Options and Solutions includes recommendations on ways governments, employers and individuals can address these identified income protection gaps. It recommends specific steps employers can take to support their employees and make them more resilient should they be faced with income loss. It lays out guides for the individual, work-based solutions and recommends policy actions. It concludes ‘that, as working lives are changing and state welfare is increasingly outdated, new partnerships between employers, governments and the working population are required to extend protection to more vulnerable groups…The recommendations put forward represent frameworks for global discussion and a broad template for national action.
Download phase III report | Embracing the income protection gaps challenge: options and solutions | November 2017