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THE EX‐ANTE EFFECTS OF NON‐CONTRIBUTORY PENSIONS IN COLOMBIA AND PERU
Author(s) -
Olivera Javier,
Zuluaga Blanca
Publication year - 2014
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.3008
Subject(s) - poverty , pension , economics , ex ante , inequality , poverty reduction , demographic economics , development economics , economic growth , macroeconomics , finance , mathematical analysis , mathematics
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 © 2014 John Wiley & Sons, Ltd.