Factors Influencinginformal Sector Workers Contributions To Pension Scheme: A Case Study Pensions Fund In Tanzania

ABSTRACT

The informal economy is characterized by less job security, lower incomes, an

absence of access to a range of social benefits and fewer possibilities to participate in

formal education and training programmes. There are several factors which need to

be study that limit informal sector workers’ contribution to pension schemes. This

study aimed to examine factors influencing informal sector worker’s contribution to

pension scheme. Specifically, addresses perception of informal workers towards

institutionalised social security schemes, factors that influence informal workers’

decision to participate in a social security schemes, challenges and constraints for

informal workers in social security schemes. Information from this sample size were

collected through questionnaire to capture the study themes. Descriptive statistics

such as frequencies and percentages were used to summarize the socio-economic

characteristics of the drives and constraints to participate in social security scheme.

The knowledge and perception towards social security scheme were analysed using

frequencies and percentages through five point Likert scale. Heckman two stage

approach was adopted in analysing the data collected from 170 informal sectors

employees in Dodoma City. The findings show that, Benefit provided by the social

security funds are strong force to encourage informal sector employees. Government

policy once are clearly formulated could encourage social security funds to provide

relevant products in the demand of informal sector employees. Informal sector

employees are limited with accessibility of social security funds due to lack of

respective information on the operation of social security institution.