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    This blog highlights effective ideas in the fight against poverty and exclusion, and analyzes the impact of development projects in Latin America and the Caribbean.
  • When you are 64

    9
    Dec
    2013

    By

    65 eng

    Right after you sing this to the tune of the Beatles song “When I’m 64”

    Sent you a pension, wrote you a check

    Stating full amount

    Indicate precisely how much is your min

    And please tell us your next of kin

    This is to help you avoid the fall

    Who could ask for more

    We will support you, staying alive

    When you’re sixty-five

    Tu ru ru tutu tu ru ru tuuu turuuu tu turuuu

    Please read this paper bearing in mind that 77 percent of Mexicans are not covered by any contributory pension scheme.

    The abstract

    The creation of non-contributory pension schemes is becoming increasingly common as countries struggle to reduce poverty. Drawing on data from Mexico’s Adultos Mayores Program (Older Adults Program) ‐a cash transfer scheme aimed at rural adults over 70 years of age‐ we evaluate the effects of this program on the well‐being of the beneficiary population.

    Exploiting a quasi–‐experimental design whereby the program relies on exogenous geographical and age cutoffs to identify its target group, we find that the mental health of elderly adults in the program is significantly improved, as their score on the Geriatric Depression Scale decreases by 12%.

    We also find that the proportion of treated individuals doing paid work is reduced by 20%, with most of these people switching from their former activities to work in family businesses; treated households show higher levels of consumption expenditures (on average, an increase of 23%). Very importantly, we also rule out significant anticipation effects that might have been associated with the program transfers.

    Thus, overall, we find that non–‐contributory pension schemes target to the poor in developing countries can improve the well-being of poor older adults without having any indirect impact (through potential anticipation effects) on the earnings or savings of future program participants.

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