IDEAS home Printed from https://ideas.repec.org/p/ucd/wpaper/201314.html
   My bibliography  Save this paper

The ex-ante effects of non-contributory pensions in Colombia and Peru

Author

Listed:
  • Javier Olivera

    (UCD Geary Institute, PEARL Institute for Research on Social Inequality, University of Luxembourg)

  • Blanca Zuluaga

    (Department of Economics, Icesi University)

Abstract

The aim of this paper is to study the ex-ante effects of the implementation of a Non Contributory Pension (NCP) program in Colombia and Peru. Relying on household survey data, we simulate the potential impact of the transfer on poverty, inequality, fiscal cost, and the probability of affiliation to the contributory pension system. This last effect is the most direct behavioural effect one can expect from the implementation of a NCP scheme. For the behavioural response we estimate a Nested Logit Model. Our results show that a NCP in Colombia and Peru contributes to the reduction of poverty and inequality among the elderly, particularly in rural areas at affordable fiscal costs. Furthermore, there is not a large impact on the probability of affiliation to contributory pensions when the program is targeted to the poor (and extreme poor), with the exception of Peruvian women.

Suggested Citation

  • Javier Olivera & Blanca Zuluaga, 2013. "The ex-ante effects of non-contributory pensions in Colombia and Peru," Working Papers 201314, Geary Institute, University College Dublin.
    • Handle: RePEc:ucd:wpaper:201314
    as

    Download full text from publisher

    File URL: http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201314.pdf
    File Function: First version, 2013
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Esther Duflo, 2003. "Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South Africa," The World Bank Economic Review, World Bank, vol. 17(1), pages 1-25, June.
    2. Victoria Hosegood & Anne Case & Cally Ardington, 2009. "Labor Supply Responses to Large Social Transfers: Longitudinal Evidence from South Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 22-48, January.
    3. Leonardo Gasparini & Javier Alejo & Francisco Haimovich & Sergio Olivieri & Leopoldo Tornarolli, 2010. "Poverty among older people in Latin America and the Caribbean," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(2), pages 176-207.
    4. John Creedy & Guyonne Kalb, 2006. "Labour Supply and Microsimulation," Books, Edward Elgar Publishing, number 4236.
    5. de Carvalho Filho, Irineu Evangelista, 2008. "Old-age benefits and retirement decisions of rural elderly in Brazil," Journal of Development Economics, Elsevier, vol. 86(1), pages 129-146, April.
    6. Irineu Evangelista de Carvalho Filho, 2012. "Household Income as a Determinant of Child Labor and School Enrollment in Brazil: Evidence from a Social Security Reform," Economic Development and Cultural Change, University of Chicago Press, vol. 60(2), pages 399-435.
    7. Marianne Bertrand & Sendhil Mullainathan & Douglas Miller, 2003. "Public Policy and Extended Families: Evidence from Pensions in South Africa," The World Bank Economic Review, World Bank, vol. 17(1), pages 27-50, June.
    8. Parijs, Philippe Van, 1997. "Real Freedom for All: What (if Anything) Can Justify Capitalism?," OUP Catalogue, Oxford University Press, number 9780198293576.
    9. Eric V. Edmonds & Kristin Mammen & Douglas L. Miller, 2005. "Rearranging the Family?: Income Support and Elderly Living Arrangements in a Low-Income Country," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    10. Dwayne Benjamin & Loren Brandt & Jia-Zhueng Fan, 2003. "Ceaseless Toil? Health and Labor Supply of the Elderly in Rural China," William Davidson Institute Working Papers Series 2003-579, William Davidson Institute at the University of Michigan.
    11. Edmonds, Eric V., 2006. "Child labor and schooling responses to anticipated income in South Africa," Journal of Development Economics, Elsevier, vol. 81(2), pages 386-414, December.
    12. Esther Duflo, 2000. "Child Health and Household Resources in South Africa: Evidence from the Old Age Pension Program," American Economic Review, American Economic Association, vol. 90(2), pages 393-398, May.
    13. Gasparini, Leonardo & Alejo, Javier & Haimovich, Francisco & Olivieri, Sergio & Tornarolli, Leopoldo, 2007. "Poverty among the Elderly in Latin America and the Caribbean," MPRA Paper 42957, University Library of Munich, Germany.
    14. Barrientos, Armando & Gorman, Mark & Heslop, Amanda, 2003. "Old Age Poverty in Developing Countries: Contributions and Dependence in Later Life," World Development, Elsevier, vol. 31(3), pages 555-570, March.
    15. Alberto Arenas de Mesa & Carmelo Mesa-Lago, 2006. "The Structural Pension Reform in Chile: Effects, Comparisons with Other Latin American Reforms, and Lessons," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(1), pages 149-167, Spring.
    16. Jean-Jacques Dethier & Pierre Pestieau & Rabia Ali, 2011. "The impact of a minimum pension on old age poverty and its budgetary cost. Evidence from Latin America," Revista de Economía del Rosario, Universidad del Rosario, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Catalina Amuedo‐Dorantes & Laura Juarez & Jorge Alonso, 2019. "The Effect Of Noncontributory Pensions On Saving In Mexico," Economic Inquiry, Western Economic Association International, vol. 57(2), pages 931-952, April.
    2. Ce Shen & Jessica Johnson & Zhenhe Chi & John B. Williamson, 2020. "Does a universal non‐contributory social pension make sense for rural China?," International Social Security Review, John Wiley & Sons, vol. 73(2), pages 3-26, April.
    3. José Luis Iparraguirre, 2020. "Economics and Ageing," Springer Books, Springer, number 978-3-030-29019-1, February.
    4. Javier Olivera & Jhonatan Clausen, 2014. "Las características del adulto mayor peruano y las políticas de protección social," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 37(73), pages 75-113.
    5. Jaime Flórez Bolanos, 2020. "Los efectos tributarios en los sectores de la economía colombiana," Apuntes del Cenes, Universidad Pedagógica y Tecnológica de Colombia, vol. 39(70), pages 141-166, July.
    6. Rafael Novella & Javier Olivera, 2017. "Cognitive functioning among poor elderly persons: evidence from Peru," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-13, December.
    7. Jorge Alonso & Catalina Amuedo-Dorantes & Laura Juárez, 2016. "The Effect of Non-contributory Pensions on Saving in Mexico," IDB Publications (Working Papers) 95976, Inter-American Development Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Javier Olivera & Jhonatan Clausen, 2014. "Las características del adulto mayor peruano y las políticas de protección social," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 37(73), pages 75-113.
    2. Herrmann, Tabea & Leckcivilize, Attakrit & Zenker, Juliane, 2021. "The impact of cash transfers on child outcomes in rural Thailand: Evidence from a social pension reform," The Journal of the Economics of Ageing, Elsevier, vol. 19(C).
    3. Kaushal, Neeraj, 2014. "How Public Pension affects Elderly Labor Supply and Well-being: Evidence from India," World Development, Elsevier, vol. 56(C), pages 214-225.
    4. Pedro Rodrigues de OLIVEIRA & Ana Lúcia KASSOUF, 2012. "Impact Evaluation of the Brazilian Non-Contributory Pension Program Benefício de Prestação Continuada (BPC) on Family Welfare," Working Papers PIERI 2012-12, PEP-PIERI.
    5. Ning, Manxiu & Gong, Jinquan & Zheng, Xuhui & Zhuang, Jun, 2016. "Does New Rural Pension Scheme decrease elderly labor supply? Evidence from CHARLS," China Economic Review, Elsevier, vol. 41(C), pages 315-330.
    6. Ponczek, Vladimir, 2011. "Income and bargaining effects on education and health in Brazil," Journal of Development Economics, Elsevier, vol. 94(2), pages 242-253, March.
    7. Jessica Standish-White & Arden Finn, 2015. "Unconditional cash transfers and children's educational outcomes: Evidence from the old-age pension programme in South Africa ," SALDRU Working Papers 147, Southern Africa Labour and Development Research Unit, University of Cape Town.
    8. Vimal Ranchhod, 2017. "Household responses to the cessation of grant income: The case of South Africa's Old Age Pension," SALDRU Working Papers 213, Southern Africa Labour and Development Research Unit, University of Cape Town.
    9. Chen, Xi, 2015. "Old-Age Pension and Intergenerational Living Arrangements," IZA Discussion Papers 9482, Institute of Labor Economics (IZA).
    10. Chen, Xi & Eggleston, Karen & Sun, Ang, 2018. "The impact of social pensions on intergenerational relationships: Comparative evidence from China," The Journal of the Economics of Ageing, Elsevier, vol. 12(C), pages 225-235.
    11. Ana lucia Kassouf & Pedro Oliveira, 2014. "Impact Evaluation of the Brazilian Social Programs on Family Welfare," ERSA conference papers ersa14p132, European Regional Science Association.
    12. Hamoudi, Amar & Thomas, Duncan, 2014. "Endogenous coresidence and program incidence: South Africa's Old Age Pension," Journal of Development Economics, Elsevier, vol. 109(C), pages 30-37.
    13. Xi Chen, 2017. "Old age pension and intergenerational living arrangements: a regression discontinuity design," Review of Economics of the Household, Springer, vol. 15(2), pages 455-476, June.
    14. Inés Berniell & Dolores de la Mata & Matilde Pinto Machado, 2020. "The Impact of a Permanent Income Shock on the Situation of Women in the Household: The Case of a Pension Reform in Argentina," Economic Development and Cultural Change, University of Chicago Press, vol. 68(4), pages 1295-1343.
    15. Alexander M. Danzer, 2013. "Benefit Generosity and the Income Effect on Labour Supply: Quasi‐Experimental Evidence," Economic Journal, Royal Economic Society, vol. 123, pages 1059-1084, September.
    16. Marito Garcia & Charity M. T. Moore, 2012. "The Cash Dividend : The Rise of Cash Transfer Programs in Sub-Saharan Africa," World Bank Publications - Books, The World Bank Group, number 2246.
    17. Agüero,Jorge M. & Fasola,Eniola, 2022. "Distributional Policies and Social Cohesion in a High-Unemployment Setting," Policy Research Working Paper Series 10103, The World Bank.
    18. Xing Ji & Jingwen Xu & Hongxiao Zhang, 2022. "How Does China’s New Rural Pension Scheme Affect Agricultural Production?," Agriculture, MDPI, vol. 12(8), pages 1-23, July.
    19. Miguel Ángel Borrella Mas & Mariano Bosch Mossi & Marcello Sartarelli, 2016. "Non-Contributory Pensions Number-Gender Effects on Poverty and Household Decisions," Working Papers. Serie AD 2016-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

    More about this item

    Keywords

    non-contributory pensions; social security; old-age; poverty;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucd:wpaper:201314. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Geary Tech (email available below). General contact details of provider: https://edirc.repec.org/data/geucdie.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.