Policy interventions aimed at expanding healthcare access during the pandemic have resulted in growth across some social security systems in Latin America. However, these gains could be labeled as precarious, given that as soon as policy support is withdrawn, you could see large drops or shifts to subsidized systems from the contributive systems supported by formal employment. In Argentina, the economy is beginning to stabilize from disruptions caused by the COVID-19 pandemic, with rebounding social mobility and exports supporting the economy in the short term. The government has also extended the ban against layoffs through the end of the year.
With an expected economic recovery in Argentina for 2022, we anticipate that the shift back into the formal labor market will continue, providing stabilization to social security revenue. In 2021, the domestic labor force fell, while self-employed labor has contracted. These are important trends because they indicate that the total number of individuals contributing to social security has increased, while the market is simultaneously shifting back to private sector employees that contribute at the highest rates.
While this is positive news for the financial outlook of the social security payers, it is important to note that the composition in the labor market is still largely unfavorable compared to the peak of the private formal labor market in 2017. At this point, the private formal market remains below its peak level, while the self-employed market remains above its peak. This has taken place amid a continuously expanding PMO (Programa Médico Obligatorio).
Our full LATAM Healthcare Monitor report takes a deeper dive into the key country-specific healthcare drivers for Argentina and the rest of Latin America, preparing your business for shifting trends in the region and providing you with actionable steps to outperform your competition in 2022.
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