Description: Universal Minimum Old Age Pensions : Impact on Poverty and Fiscal Cost in 18 Latin American Countries

Universal Minimum Old Age Pensions : Impact on Poverty and Fiscal Cost in 18 Latin American Countries

Alleviating poverty for the elderly requires a different approach from other age groups, and a minimum pension is likely to be the only viable option. This paper examines the impact on old age poverty and the fiscal cost of universal minimum old ag...

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Bibliographic Details
Main Authors:	Dethier, Jean-Jacques, Pestieau, Pierre, Ali, Rabia
Language:	English
Published:	2012
Subjects:	ABSOLUTE TERMS ADMINISTRATIVE COSTS ALLOCATION OF RESOURCES ARBITRAGE ASYMMETRIC INFORMATION BENEFICIARIES BENEFICIARY BUDGET CONSTRAINT CASH TRANSFER CHILD LABOR CHILD MORTALITY CITIZENSHIP CONSUMPTION BASKET CONSUMPTION DATA CONVERSIONS DECLINE IN POVERTY DEMAND FOR FOOD DEPENDENCY RATIOS DEVELOPING COUNTRIES DEVELOPMENT ASSISTANCE DURABLE DURABLE GOODS ECONOMIC GROWTH ECONOMIC TRANSITION ELDERLY ELDERLY HOUSEHOLDS ELDERLY PEOPLE ELDERLY PERSONS EQUALITY OF OPPORTUNITY EXPENDITURE EXTENDED FAMILIES EXTENDED FAMILY FAMILY COMPOSITION FAMILY INCOME FAMILY MEMBERS FAMILY SIZE FAMILY STRUCTURE FAMILY STRUCTURES FAMILY TIES FAMILY UNIT FAMILY UNITS FERTILITY FINANCIAL RISK FISCAL CAPACITY FISCAL POLICIES FOOD POLICY GENDER EQUALITY GROSS DOMESTIC PRODUCT HEALTH CARE HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD PER CAPITA INCOME HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HOUSING HUMAN DEVELOPMENT IMPACT ON POVERTY INCIDENCE OF POVERTY INCOME INCOME GROWTH INCOME INEQUALITIES INCOME LEVEL INCOME LEVELS INCOME POVERTY INDICATOR OF POVERTY INDIVIDUAL DECISIONS INEQUALITY INFANT INFLATION INFLATION RATES INSTRUMENT INSURANCE INSURANCE PREMIUM INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE INTERNATIONAL POVERTY LINE LABOR FORCE LABOR SUPPLY LIFE EXPECTANCY LOCAL CURRENCY LOW POVERTY RATES LOW-INCOME COUNTRIES MEANS TESTING MEASUREMENT OF POVERTY MICRODATA MONETARY FUND NATURAL RESOURCES NEWBORN NUMBER OF ADULTS NUMBER OF CHILDREN OLD AGE OLD AGE PENSION OLD AGE POVERTY OLD-AGE OLDER PEOPLE PENSION PENSION INCOME PENSION REFORM PENSION RIGHTS PENSION SYSTEM PENSION SYSTEMS PENSIONS PERSONAL INCOME POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLITICAL ECONOMY POLITICAL SUPPORT POOR POOR AREAS POOR COUNTRIES POOR FAMILIES PORTFOLIO POVERTY GAP POVERTY GAP INDEX POVERTY LEVEL POVERTY LEVELS POVERTY LINE POVERTY RATE POVERTY RATES POVERTY REDUCTION POVERTY THRESHOLD PRICE SUBSIDIES PROGRESS PUBLIC POLICY PURCHASING POWER PURCHASING POWER PARITY REDUCTION IN POVERTY RESPECT RETURN RICHER COUNTRIES RURAL RURAL AREAS RURAL INCOMES RURAL POPULATION RURAL WORKERS SAFETY NET SOCIAL AFFAIRS SOCIAL ASSISTANCE SOCIAL INSURANCE PROGRAMS SOCIAL POLICY SOCIAL PRESSURE SOCIAL PROTECTION SOCIAL SECURITY SOCIAL WELFARE SPILLOVER STOCK MARKET TAX TRANSITION ECONOMIES TRANSPORTATION UNITED NATIONS POPULATION DIVISION URBAN POPULATION WELFARE INDICATOR WOMAN WORLD POPULATION
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100506135339 http://hdl.handle.net/10986/3779

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Summary:	Alleviating poverty for the elderly requires a different approach from other age groups, and a minimum pension is likely to be the only viable option. This paper examines the impact on old age poverty and the fiscal cost of universal minimum old age pensions in 18 Latin American countries using recent household survey data. First the authors measure old age poverty rates for these countries. Then they discuss the design of minimum pensions schemes -- means-tested or not -- as well as the disincentives they introduce for the economic and social behavior of households including labor supply, saving and family solidarity. Finally, the authors use household survey data to simulate the fiscal cost and the impact on poverty rates of alternative minimum pension schemes in the 18 countries. They show that a universal minimum pension would substantially reduce poverty among the elderly (except in Argentina, Brazil, Chile and Uruguay where minimum pension systems already exist and poverty rates are low). Such schemes have much to be commended in terms of incentives, spillover effects and administrative simplicity, but they have a high fiscal cost. The latter is a function of the age at which benefits are awarded, the prevailing longevity, the generosity of benefits, the efficacy of means testing, and the fiscal capacity of the country.

Universal Minimum Old Age Pensions : Impact on Poverty and Fiscal Cost in 18 Latin American Countries

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