Journal
JOURNAL OF INTERNATIONAL DEVELOPMENT
Volume 26, Issue 7, Pages 949-973Publisher
WILEY
DOI: 10.1002/jid.3008
Keywords
non-contributory pensions; social security; old age; poverty; Latin America
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This paper studies the ex-ante effects of the implementation of a non-contributory pension (NCP) programme in Colombia and Peru. Relying on household survey data, we simulate the transfer's potential impact on poverty, inequality, fiscal cost and the probability of affiliation to contributory pensions. Our results show that an NCP reduces poverty and inequality among the elderly, particularly in rural areas, at an arguably limited fiscal cost. Regarding behavioural effects, there is not a large impact on the probability of affiliation to contributory pensions when the programme is targeted to the poor, with the exception of Peruvian women. Finally, we also compute some potential effects on the recipient's labour supply. Copyright (C) 2014 John Wiley & Sons, Ltd.
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