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Among social security systems, healthcare is widely implemented by many countries, and several have achieved universal health insurance coverage. However, according to ILO data, nearly two-thirds of the global population is covered by at least one social health protection program (through health insurance or free medical care). Around 30% of the global population still lacks access to health insurance and basic medical services. Additionally, several limitations in healthcare accessibility persist. The proportion of out-of-pocket expenses for medical services remains high. Thus, while healthcare services are among the most easily expanded social security services, significant challenges remain, requiring efforts from countries, particularly in the face of non-traditional risks such as the COVID-19 pandemic or global climate change.

According to ILO statistics, the coverage and benefits of social insurance, health insurance, and unemployment insurance remain limited. The proportion of workers receiving unemployment benefits when unemployed is only 18.6% worldwide. For sickness benefits, only 30% of the working-age population is covered.

In social security systems, pensions are the most common form of social protection. ILO statistics show that 79.6% of people above retirement age receive a pension. However, over 165 million elderly individuals do not receive any pension benefits. Ensuring adequate income security for the elderly remains a challenge, especially for women, low-income workers, those in precarious employment, gig workers, and migrant workers. These challenges may worsen due to climate change, leading to involuntary migration, job instability, or economic pressures.

In many countries, particularly those with high rates of informal employment, the expansion of pension coverage (through contributory schemes) has not progressed quickly enough to ensure income security in old age. The implementation of tax-funded pension benefits provides an essential source of income for elderly individuals who do not qualify for social insurance pensions. However, in some countries, pension benefits are insufficient to ensure social security for the elderly.

Globally, public spending on pensions and other non-healthcare benefits for the elderly averages 7.6% of GDP. However, regional disparities are significant, with spending ranging from 10.5% of GDP in Europe to only 1.7% in Africa. Additionally, the climate crisis threatens the sustainability of social insurance pension programs. Therefore, pension systems must adapt to climate-related risks to ensure long-term sustainability and protect beneficiaries’ quality of life.

Challenges in Expanding Social Security Coverage

According to socio-economic experts, the primary bottlenecks in expanding social security coverage include:

• Insufficient investment in social security: This is particularly evident in Africa, Arab countries, and Asia, where governments allocate only about 12.9% of GDP to social security (excluding healthcare). Government spending on social security varies significantly across regions and income levels. While high-income countries spend an average of 16.4% of GDP, low-income countries allocate only 1.1%. Since the outbreak of COVID-19, financial shortages for social security have increased by approximately 30%, primarily due to rising demand for healthcare and income security services.

• Lack of flexibility in policy design and implementation: Rigid policies reduce public participation in social security programs, especially for contributory schemes such as social insurance. This is particularly true for workers in the private sector and the gig economy. The gig economy consists of short-term, technology-based jobs that are highly flexible but difficult to regulate, leaving workers more vulnerable.

• Population aging: This is a growing challenge for both developed and developing countries (such as Vietnam), where aging is accelerating. Rapid demographic shifts threaten the financial balance of social security systems and affect long-term coverage.

Social Security Reforms

Faced with these challenges, countries have been compelled to implement social security reforms. However, according to international experts, expanding social security coverage remains difficult. The ILO notes that under contributory schemes, the negative impacts of economic globalization have shortened job stability cycles in many countries. The rise of informal employment, coupled with a large existing informal workforce, means the number of workers contributing to social security systems is either declining or struggling to expand to universal coverage.

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To address this, countries need to:

Improve institutional frameworks and policies to enhance flexibility.

Increase public spending on social security.

According to ILO estimates, to ensure at least a basic level of social security through national social protection floors, middle-upper-income countries need to invest an additional $750.8 billion annually (3.1% of GDP). Lower-middle-income countries require $362.9 billion per year (5.15% of GDP), while low-income countries need $77.9 billion annually (15.9% of GDP).

The ILO warns that without adequate investment in social security, countries risk falling into a “low-cost–low-human-development” trap, making it impossible to achieve universal social security coverage.

Japan

After World War II, the Japanese government prioritized improving living standards by ensuring social security for its citizens. The 1946 Japanese Constitution states that all citizens have the right to a minimum standard of cultural and health-based living. This provision laid the legal foundation for expanding social security coverage in modern Japan.

Japan’s social security policies have evolved through four main phases:

1945–1955: Emergency relief and infrastructure development.

1955–1975: Development of universal health insurance and the pension system.

1975–late 1980s: Stabilization and expansion of social security programs.

1989–present: Reforms to address economic downturns, aging population, and declining birth rates.

The Japanese government plays a dominant role in providing social security through insurance and social assistance programs. Japan’s social security system consists of three main components: Healthcare, Pension (the largest expenditure) and other social welfare benefits.

Social security has been instrumental in Japan’s economic development, ensuring income security for those in special circumstances. Despite its success, challenges such as an aging population and rising healthcare costs threaten financial sustainability. To address these issues, Japan has undertaken reforms, including:

• Fiscal restructuring

• Labor market policies to promote employment and attract workers

• Pension system reforms, shifting toward individual accounts to reduce the burden on the workforce while ensuring retirees' long-term income.

China

China’s 17th Communist Party Congress (2007) emphasized that social security should be based on social insurance, social assistance, and social welfare. The country has pursued universal social security coverage by transitioning from a "unit-based" to a "society-based" social security model.

Under the previous unit-based model, businesses were responsible for workers' social security, resulting in narrow coverage and weak support mechanisms. Following economic reforms, this model became incompatible with labor market competition and workforce mobility. China then established a society-based social security system, separating social security from employers.

Key aspects of China’s social security reforms include:

• Integration of individual savings and social pooling in pension and health insurance systems.

• Incentives for individual participation, ensuring benefits are linked to contributions.

• Balancing equity and efficiency to encourage workers to participate in social insurance.

By shifting from enterprise-based to society-based security, China has enhanced workforce mobility and business productivity, strengthening national economic development.