Writers: Traute Meyer, Marwa Galal Abdelwanis, Gerard Kennedy
Successful social policies stabilise societies, according to welfare state research. During the Egyptian revolution of 2011, one demand people made was to reform a pension system which did not prevent poverty. In response, in 2019 the government implemented legislation aimed to extend coverage, improve long-term living standards, and achieve equity for all Egyptians. This research brief summarizes a study on the extent to which the reform addressed the grievances expressed and thus helps to prevent future conflict in Egypt. Using hypothetical biographies, micro-simulation models of the pre- and post-reform pension systems and actuarial modelling the research compares outcomes under the old and the reformed system.
The study finds that the big pension reform of 2019 will raise the incomes of system members and make them more equal. However, coverage has not improved, leaving most workers and most (economically inactive) women uninsured. Thus, the demands of 2011 by those not already part of a pension elite remain unheard. The current pension system is unlikely to be an instrument of social peace because the risk of poverty and insecurity in old age still overshadows the lives of most people. Further reform must make pensions more accessible for all women, the poor and be more affordable. Meanwhile the social assistance system will remain a significant last resort.
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