Formalization of Informal Sector Business Enterprises and Accessibility to Social Security Services by Workers in Uganda's Informal Sector

Abstract

The study examined the effect of the formalization of informal sector business enterprises on accessibility to social security services by workers in Uganda's informal sector. This study was motivated by the persistent concerns and outcry by stakeholders over the inadequate access to social security services by workers in the informal sector despite the sector's huge contribution to the country's economic development. Moreover, the study adopted a quantitative research approach and employed a descriptive correlational research design. Quantitative data were collected using the questionnaire method from 302 respondents who were randomly selected from the informal sector and analyzed using descriptive and regression analysis methods. Findings revealed that registration of informal sector businesses (B=.166; p=.001), accessibility to finances (B=.329; p=.000), and informal sector regulatory policies (B=263; p=.000) have a statistically significant effect on the accessibility to social security services. However, overall, the study revealed that formalization (R=.616; R 2 =.379; p=.000) has a significant influence on accessibility to social security services in the informal sector in Uganda. Therefore, it was concluded that other factors remaining constant, formalization of informal business enterprises would enhance accessibility to social security services by workers in Uganda's informal sector. Thus, the study recommends that stakeholders need up all efforts aimed at formalizing the informal sector to enhance accessibility to social security services by workers in Uganda's informal economy.