Non-universal social protection systems and labor market outcomes in unstable economies: the case of Lebanon

Purpose This study investigates the welfare implications of publicly mandated social security programs in Lebanon, focusing on their impact on employment choices and labor market outcomes. The recent crises in Lebanon have highlighted the urgent need for universal social protection measures that extend coverage beyond formally employed individuals to marginalized and informal workers. By analyzing the role of National Social Security Fund (NSSF) enrollment, this research aims to provide insights into how social security programs influence the labor market, particularly in fostering wage employment over self-employment and addressing disparities in access to social protection. Design/methodology/approach The study employs an empirical approach using Lebanon's latest labor force household survey data (2019). A multinomial logit model evaluates how NSSF enrollment affects employment choices, distinguishing between wage employment, self-employment and other labor market categories. This quantitative analysis examines the relationship between social security coverage, education levels and employment outcomes, providing a comprehensive understanding of the structural barriers different groups face in accessing social protection. The methodology facilitates a robust examination of the interplay between social security participation and labor market dynamics in economic instability. Findings The findings reveal that NSSF enrollment significantly increases the likelihood of workers opting for wage employment over self-employment. Highly educated individuals demonstrate the highest levels of NSSF coverage and are more likely to engage in wage employment. Conversely, self-employed workers face substantial challenges securing social security coverage, which correlates with less favorable labor market outcomes. The study highlights the need for inclusive reforms to expand social security schemes' reach, address coverage gaps for self-employed and informal workers and enhance their socioeconomic welfare. Originality/value This research provides valuable empirical insights into the interplay between social security enrollment and labor market outcomes in Lebanon, a context marked by economic crises and inadequate social protection systems. Focusing on the NSSF's role, the study contributes to the broader discourse on universal social protection and labor market equity in developing economies. Its findings underscore the importance of reforming existing schemes to include marginalized groups, particularly informal and self-employed workers, offering a policy-relevant perspective to promote inclusive economic recovery and social welfare in Lebanon.