CAPÍTULO X MÁNTRAM YOGA
DHARMA YOGA EL YOGA DEL SERVICIO
The importance of social insurance coverage is highlighted by the results of the calculations of incapacity benefits. Figure 24 shows the 2012 disposable income as a percentage of the original for male-headed households with original earnings of five times the minimum wage at two moments: after contributions and taxes and after contributions, taxes and incapacity benefits. The effects would be the same for 1994 and for other income levels, since the reforms did not modify the rules and wage replacement percentages do not vary across income levels. The figure shows
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the results for three employment status: a household with an earner employed in the formal private sector, which would receive benefits from the IMSS; a household with an earner employed in the public sector, which would receive benefits from the ISSSTE and a household with a self-employed earner and no social insurance coverage. The households with its earner employed in the informal economy would show the same effects as the household with the self- employed earner.
Figure 25. Disposable Income after Incapacity Benefits, 3 Employment Profiles, 2012 (% of Original Earnings)
Source: Own calculations.
As can be observed, the household with the earner receiving benefits from the IMSS would lose slightly more than one percentage point of disposable income because sick paid leave would not cover the first four days of incapacity and after that fourth day it would only be paid at 60 per cent of wage. The household with an earner receiving benefits from the ISSSTE would not lose any income because all days of incapacity would be covered at 100 per cent of wage. However the case, in both of them social insurance coverage would protect families from loss of income, but households that lack coverage would be left unprotected.
Disposable income of a household with a self-employed earner would drop almost four percentage points if the earner was unable to work during 14 days. The same drop would be
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expected for a household with an earner employed in the informal economy; and the larger the incapacity period the higher the percentage of disposable income that would be lost.
Indeed, the figures illustrate the extent to which households with no social insurance coverage are left unprotected from loss of income when earners are unable to work. These figures result from simulating only 14 days of incapacity, however, in practice incapacity periods tend to last for slightly longer periods. For example, the IMSS registers an average of 10 days of incapacity for each incapacitated worker due to an illness not related to his/her job, and 27 days for each incapacitated worker due to a work injury (Echevarría-Zuno et al., 2008). Hence the disadvantage of not being protected against illnesses and accidents could in practice be much worse than what the figure shows.
The disadvantage of not receiving social insurance coverage is more serious for households with female earners. For the calculations these households were assumed to be headed by women with no other earners, with a period of 90 days of incapacity due to the birth of a child. Maternity leave for private sector employees only covers 84 days in total, 42 days before and 42 days after birth, and the system’s rules state that any additional days of incapacity derived from giving birth to a child would be paid as a sick leave at 60 per cent of wage. Maternity leave for public sector employees covers the whole period of 90 days, one month before and two months after birth. Self-employed women would not be entitled to social insurance and would not receive any protection from loss of income. Figure 25 compares the 2012 disposable income as a percentage of the original before and after periods of incapacity. The indicators include all taxes and contributions and three periods of incapacity: one due to an illness not related to their job, one due to a work injury and one due to maternity.
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Figure 26 Disposable Income of Female-Headed Households after Incapacity Benefits, 3 Employment Profiles, 2012 (% of Original Earnings)
Source: Own calculations.
The results illustrate the difference in the levels of protection across employment status. The household with the female earner employed in the public sector would enjoy full income protection since all days of incapacity would be paid at 100 per cent of wage. The household with the earner employed in the private sector would register a drop in its disposable income of almost two percentage points, slightly more than a household headed by a male earner of the same employment status because six days of maternity incapacity would be paid like sick leave. The lowest drop would be registered for female headed households with no social insurance coverage because they would not receive any benefits; hence their disposable income would drop in almost 30 percentage points if they had taken 90 days off work to prepare and recover from giving birth.
The results of the calculations illustrate the different levels of protection offered the Mexican system to families whose earners are affected by an event that would incapacitate them to perform their job. Public sector workers would enjoy higher levels of income protection than workers employed in the private sector; whilst families with no social insurance coverage would be left completely unprotected. Families of female earners with no social insurance who decide
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to have a child would be even more unprotected, because of the lack of maternity benefits. The next section discusses the effects of cash benefits offered by the Oportunidades programme.