Age Pension Scheme Research Articles

Organizing old age pensions for India’s unorganized workers: A case study of a sector-driven approach

Abstract About 88 percent of India’s total labor force is composed of informal (officially labeled “unorganized”) workers. As many as 388 million such workers lack old age income security by way of a pension system. The Atal Pension Yojana (APY) is the latest contributory, national-level old age pension scheme for unorganized workers, with an entry age of 18–40 years. In other words, all current unorganized workers above the age of 40 are excluded. How could a national pension system viably guarantee equal pension benefits to all current unorganized workers? This paper considers how such a system might work by offering a case study of a non-contributory pension scheme for building and other construction workers in Karnataka State, India. The results indicate that this state-level pension scheme, fully funded by sector-specific receipts, is financially viable and sustainable with high levels of coverage and adequacy. The robustness of these results is shown via sensitivity analyses of discount rates, inflation rates, and growth rates of specific purpose tax collections. Additional analyses outline the scenarios under which pension benefits could be extended to all informal workers in the sector studied.

Organizing Old Age Pensions for India's Informal Workers: A Case Study of a Sector-Driven Approach

About 88 percent of India’s total labor force is composed of informal (officially labeled “unorganized”) workers. As many as 388 million such workers lack old age income security by way of a pension system. The Atal Pension Yojana (APY) is the latest contributory, national-level old age pension scheme for unorganized workers, with an entry age of 18–40 years. In other words, all current unorganized workers above the age of 40 are excluded. How could a national pension system viably guarantee equal pension benefits to all current unorganized workers? This paper considers how such a system might work by offering a case study of a non-contributory pension scheme for building and other construction workers in Karnataka State, India. The results indicate that this state-level pension scheme, fully funded by sector-specific receipts, is financially viable and sustainable with high levels of coverage and adequacy. The robustness of these results is shown via sensitivity analyses of discount rates, inflation rates, and growth rates of specific purpose tax collections. Additional analyses outline the scenarios under which pension benefits could be extended to all informal workers in the sector studied.

Universal social pension for elderly individuals in India

PurposePopulation ageing, extended coverage of beneficiaries and rise in benefit levels of a public-funded universal social pension scheme (USPS) for elderly individuals may exert fiscal pressures on India’s General Government. Using accounting frameworks, this paper aims at an assessment of public expenditure requirements of USPS scenarios in the short term and their long-term implications for fiscal sustainability.Design/methodology/approachShort-term public expenditure requirements are quantified for the current pension scheme and proposed USPS scenarios, if pension benefits are adjustable for official poverty line, per capita income, the inflation rate and income elasticity of public pension expenditure. Long-term fiscal sustainability is determined by the methodology of generational accounting.FindingsPublic expenditure requirements for the USPS scenarios are remarkably higher as compared to the current expenditure on the Indira Gandhi National Old Age Pension Scheme (IGNOAPS). Short-term analyses offer economic justifications for an increase in pension benefits either by a single adjustment factor or combined adjustment factors but at a cost of remarkable increase in public expenditure requirements. Long-term analyses show that the IGNOAPS and proposed USPS scenarios are fiscally sustainable but sensitive to five parameters (productivity growth, inflation rate, discount rate, income elasticity public pension expenditure and income elasticity of health expenditure). A policy mix of these parameters leads to fiscal sustainability of the IGNOAPS and proposed USPS scenarios with differential impacts on inter-generational distribution of welfare by tax and transfer adjustments.Research limitations/implicationsApplication of the generational accounting methodology is new for India’s pension economics and may have applicability and relevance for future extensions and analyses of other fiscal policy issues. This paper sets a benchmark for such extensions and applications.Practical implicationsThe analyses and implications offer economic justifications for increase in levels of pension benefits by the current pension scheme and proposed USPS scenarios, introduction of sustainable USPS scenarios under current fiscal policies and choice of design parameters for a fiscally sustainable USPS.Social implicationsSocial pensions have implications for providing income security and livelihood benefits for all elderly civilians in society.Originality/valueThe paper adds to the existing knowledge on economic analyses and fiscal implications of India’s old age pension policies in general and social pension policies in particular. Subject to the comparability of socio-economic structures and pension programmes, the methodology and public policy analyses of this paper may be of relevance and applicability for developing countries in Asia.

Der neoliberale Rentenkonsens in Deutschland und seine Genese

The reform of the old age pension scheme the last twenty years was part of an international transformation process of the old-age insurance systems since the 1980s. The core element is the conversion from the pay-as-you-go systems to capital-funded models with a shifting to individual provision and risk taking. This politically intended break shows fatal distributional and economic effects in the present. Neither a more stable, more cost-effective, more efficient old-age insurance could be established for the majority of employees, nor did the capital market-financed pension system automatically promote innovation and economic growth. In the end, most of the political promises and allegations of the reformists have already been rejected by real social and economic developments. Poverty among the elderly will rise in the near future dramatically due to the deformation of the statutory pension system, the great distortions on the labour market and rising inequality. Nevertheless, the pension consensus still holds at the moment but a radical paradigm shift and a clear revision of past reforms are overdue.

Quality of Life of the Elderly Receiving Old Age Pension in Lesotho

ABSTRACTThe southern African country of Lesotho introduced an old age pension scheme in 2004 with the aim of enhancing the quality of life (QoL) of the nation’s elderly population. This study is the first to assess the physical, psychological, social, and environmental aspects of the health-related QoL of the elderly in Lesotho since the pension scheme was adopted. Data for this study were gathered using the World Health Organization QoL-BREF questionnaire. Mean QoL scores were compared across demographic, socioeconomic, and clinical variables using analysis of variance, t test, and regression analysis. Findings indicate that respondents were least satisfied with the environmental and physical domains of QoL. They also indicate that the overall QoL of the elderly in Lesotho was mainly affected by marital status, level of education, type of housing, source of income, and level of satisfaction with income. These factors should thus be taken into account when developing interventions aimed at improving the QoL of the elderly in Lesotho.

Rural migrants’ participation in old-age insurance: a case study of the inter-provincial migrant workers from Sichuan, China

ABSTRACTOld-age pension, a fundamental part of the Chinese social security system, is perceived by the Chinese government as the last support for rural-to-urban migrant workers upon retreating from the labor market. Using survey data collected by the authors, this paper examines a host of factors which influence migrant workers’ participation in the old-age scheme. The result shows that individual characteristics, employment status, attitudes toward old-age support and perception of the old-age pension system significantly differentiate two groups of migrant workers between those that have participated in and their counterparts who have not participated in the old-age pension schemes. Among a number of factors, age, educational attainment, holding labor contract, etc. are found to be significant factors influencing migrants’ behavior participating (or not participating) the available age-pension schemes. Policy implications for how to improve the rate of participation in existing old-age pension schemes a...

Social Security Measures for Elderly Population in Delhi, India: Awareness, Utilization and Barriers.

World population of elderly is increasing at a fast pace. The number of elderly in India has increased by 54.77% in the last 15 years. A number of social security measures have been taken by Indian government. To assess awareness, utilization and barriers faced while utilizing social security schemes by elderly in a secondary care hospital situated in a rural area in Delhi, India. A cross-sectional study was conducted among 360 individuals aged 60 years and above in a secondary care hospital situated in a rural area in Delhi. A pre-tested, semi-structured schedule prepared in local language was used. Data was analysed using SPSS software (version 17.0). Chi-square test was used to observe any statistical association between categorical variables. The results were considered statistically significant if p-value was less than 0.05. A majority of study subjects were females (54.2%), Hindu (89.7%), married (60.3%) and were not engaged in any occupation (82.8%). Awareness about Indira Gandhi National Old Age Pension Scheme (IGNOAPS) was present among 286 (79.4%) and Annapurna scheme in 193 (53.6%) subjects. Among 223 subjects who were below poverty line, 179 (80.3%) were aware of IGNOAPS; while, 112 (50.2%) were utilizing the scheme. There was no association of awareness with education status, occupation, religion, family type, marital status and caste (p>0.05). Corruption and tedious administrative formalities were major barriers reported. Awareness generation, provision of information on how to approach the concerned authority for utilizing the scheme and ease of administrative procedures should be an integral part of any social security scheme or measure. In the present study, about 79.4% of elderly were aware and 45% of the eligible subjects were utilizing pension scheme. Major barriers reported in utilization of schemes were corruption and tedious administrative procedures.

Beneficiary Satisfaction Regarding Old Age Pension Scheme and Its Utilization Pattern in Urban Puducherry: A Mixed Methods Study.

National Old Age Pension Scheme (NOAPS) was aimed at providing a safety net for India's aging population in terms of social, economical and moral support by helping eligible elderly citizens with direct cash benefit. To assess the beneficiary satisfaction and utilization pattern of the monetary benefit received under the old age pension scheme and to explore the perception of the stakeholders regarding delivery of the pension. This is a mixed method research consisting of both quantitative surveys and qualitative in-depth interviews. The survey was conducted among 205 randomly selected beneficiaries of old age pension scheme belonging to urban Puducherry. Around 12 qualitative interviews were conducted with beneficiaries, family members and Anganwadi workers. The mean age of the study participants was 71 years. Almost 80% of participants avail pension from banks. Majority of participants (98%) were satisfied with the overall scheme, though half of them expressed their dissatisfaction with the amount of pension received. Among the study subjects, 65% were satisfied regarding the mechanism of delivery of old age pension. Anganwadi was the preferred mode of payment in 80% subjects. Around 85% of them spent the entire pension amount for their own use (health needs, travel, daily activities and social needs) while the remaining gave some economic support to their family. Half of them (55%) felt that they possess financial autonomy in planning their expenditure. Majority felt that receiving pension had given them economic empowerment, self-esteem and renewed confidence in life. Financial assistance to the elderly empowers them and improves their social status, independence, self-esteem and overall quality of life. With increasing proportion of elderly in Indian population, it is important to study the effectiveness of such schemes so that corrective measures can be taken to facilitate its access to the disadvantaged section of the society.

Factors Influencing the Participation in Defined Contribution Pension Scheme by the Urban Unorganized Sector in India

The present study is focused towards understanding the financial behavior of unorganized workers about the various old age pension schemes provided by the Government of India, and their willingness to participate for voluntary contribution for old age. This paper has comprehensively analysed the issues related to New Pension Schemes (NPS) and highlights the appropriate gaps in the system through an empirical study in Burdwan District, West Bengal, India. The present study assesses the overall awareness level of NPS products and the factors that influence the individual behavior regarding everyday financial decisions. The study further examines the relative significance of these factors on voluntary participation in the NPS and finds that future financial concern and financial advice are very important factors that influence the decision making of the individuals. But the financial literacy is pivotal for awareness of the availability of such schemes for old age security.

Old age insurance participation among rural-urban migrants in China

Background: The Chinese government has been introducing reform policies to improve the existing social security system, including the old age insurance schemes for rural-urban migrants. However, there are still challenges in the current system that hinder migrants who move frequently from participating in old age insurance schemes. Objective: The objectives of this paper are to describe the current coverage of old age insurance amongst migrant workers and examine the associated individual, household, and geographical factors, and to predict the probability of old age insurance participation among rural-urban migrants by province and relevant migrant characteristics. Methods: Data for the analysis are drawn from the 2011 Migrant Dynamics Monitoring Survey in China. The sample consists of 110,005 migrant workers with rural household registration. The analysis considers multinomial logistic regression with type of old age insurance as the outcome variable. Results: Of all rural-urban migrant workers nationwide, 16.4% have participated in the Basic Pension Insurance for urban employees, 9.8% in the New Old Age Pension scheme for rural residents, 3.3% are covered by both schemes, and 70.5% have no coverage with any old age pension scheme. Migrants moving within provinces or from relatively wealthy households are more likely to participate in an old age insurance scheme than those moving across provinces or from relatively poor households. Migrants' occupational status also influences their participation in old age pension schemes. The predicted probability of participation varies across China by province.

Cash Transfers and Child Labor

Cash transfer programs are widely used in settings where child labor is prevalent. Although many of these programs are explicitly implemented to improve children’s welfare, in theory their impact on child labor is undetermined. This paper systematically reviews the empirical evidence on the impact of cash transfers, conditional and unconditional, on child labor. The authors find no evidence that cash transfer interventions increase child labor in practice. On the contrary, there is broad evidence that conditional and unconditional cash transfers lower both children’s participation in child labor and their hours worked and that these transfers cushion the effect of economic shocks that may lead households to use child labor as a coping strategy. Boys experience particularly strong decreases in economic activities, whereas girls experience such decreases in household chores. The authors findings underline the usefulness of cash transfers as a relatively safe policy instrument to improve child welfare but also point to knowledge gaps, for instance regarding the interplay between cash transfers and other interventions, that should be addressed in future evaluations to provide detailed policy advice. The remainder of this review is organized as follows. Section 1 provides the necessary background. It heuristically describes why the effects of cash transfers on child labor are theoretically undetermined, and it introduces the procedure that we used to identify the relevant studies for this review. Section 2 discusses the impact of two subsets of unconditional cash transfers: programs designed to support poor households’ investments in children’s human capital and old age pension schemes. Section 3 discusses the average impact of conditional cash transfer schemes on the intensive and extensive margin of child labor, the impact of conditional cash transfers on child labor compared to their impact on school participation, heterogeneity by poverty, age, and gender, spillover effects, long-run effects, determinants of program effects, protection from shocks, and variations on the basic conditional cash transfer scheme. Section 4 discusses and concludes.

Pension system development and the sustainability of the principle of generation solidarity

The problem of pensions is one of the social topical issues because a complicated demographic situation makes it difficult to observe the principle of generation solidarity in long-term formation of the pension funds. The phenomenon of pension in its evolutionary development has been investigated with an attempt to assess its social significance and efficiency. The given article describes the results of the conducted research in which various pension schemes are compared from the point of view of their social worthiness. The suggested assessment of various systematized public old age pension schemes arranged chronologically, became the basis that allowed creating a short and the most popular assessment of the systematized public old-age pension scheme. It shows that the public old age pension system of this country is based on the principle of solidarity between generations and that this principle has started to use up its positive potential. It will also be the final conclusion. The article examines first forms of old age security; explores some features of systematized pension systems; describes a socially responsible approach to the problem of pension provision by the state; and assesses the principle of generation solidarity as a basis of pension capital formation, the consequences of this principle application, its sustainability and reliability.

Impact of population ageing on sustainability of India’s current fiscal policies: A Generational Accounting approach

Using the methodologies of Generational Accounting and National Transfer Accounts, this paper analyzes the sustainability of India’s current fiscal policies in the context of population ageing from 2005 through 2100. Sustainability is evaluated by Generational Imbalance under the current policies (baseline scenario) and expected cash transfers reform on a universal old age pension scheme (expected reform scenario). Sources of sustainability are traced to net debt and demographic transition effects. Sensitivity of sustainability is determined by alternative assumptions on productivity growth, discount rate and income elasticity of public expenditure on the cash transfers. The main conclusion shows that India’s current fiscal policies and the expected cash transfers reform are unsustainable. However, sustainability is restorable if policy makers can restrain the income elasticity of public expenditure on the cash transfers to about 0.60 (or 0.45) in the baseline (or expected reform) scenario. Further, given these income elasticities, a lower discount rate and a higher growth rate of productivity would make a remarkable impact on reduction in tax burden of current and future generations in order to sustain the fiscal policies in both scenarios. These evidences offer a cautious empirical support for implementation of the current policies and the expected reform on a universal old age pension scheme without sacrificing the sustainability, or intergenerational balance in the distribution of welfare, as India experiences population ageing.

The Unorganized Workers Social Security Act, 2008 - An Approach to Provide Basic & Contingent Social Security to the Unorganized Workers in India

The Unorganized Workers Social Security Act, 2008 - An Approach to Provide Basic & Contingent Social Security to the Unorganized Workers in India

How Public Pension affects Elderly Labor Supply and Well-being: Evidence from India

Summary I study the effect of a recent expansion in India’s National Old Age Pension Scheme on elderly well-being. Estimates suggest that public pension has a modestly negative effect on the employment of elderly/near elderly men with a primary or lower education but no effect on the employment of similar women. Pension raised family expenditures, lowering poverty, and the effect was smaller on families headed by illiterate persons suggesting lower pension coverage of this most disadvantaged group. Further, I find that households spent most of the pension income on medical care and education, suggesting possible intra-family transfers across generations.

Association of psychological morbidity with socio-demographic characteristics among elderly: A cross-sectional study from Eastern India

Background: The psychological morbidity of the geriatric people is very common. There are different socio-demographic factors affecting the psychological health of elderly, which have not been studied in detail in India. Objective: The present study was framed to find out the association of different socio-demographic factors with the psychological morbidity of the elderly. Materials and Methods: It was a community-based cross-sectional study conducted in Municipal area of Tarakeswar, Hooghly District, West Bengal, India among the geriatric people using a pre-designed, pre-tested, semi-structured schedule to collect the socio-demographic data. General Health Questionnaire-28 was used to collect data regarding psychological morbidity. Statistical analysis was done using SPSS version 16.0. Results: It was revealed that only 29.4% of the respondents scored within normal range. Multiple linear regression taking total as well as domain-wise scoring as dependent variable revealed that increasing age, female sex, illiteracy, financial dependency on other family members, not living with spouse, and poor socio-economic status are significantly associated with psychological morbidity. Conclusion: Overall mental health condition of geriatric people is not good. Proper rehabilitation measures have to be taken by family members, society, and government like engaging them in light activities of their interest, old age pension scheme or forming self-help group among elderly, which would result in making them happy.

MEANS-TESTED AGE PENSIONS AND HOMEOWNERSHIP: IS THERE A LINK?

Although several targeted welfare programs across the world have made owner-occupied housing exempt from the means test, relatively little is known about the impact of such exemption on portfolio choice and consumption. We study the Australian age pension scheme and argue that current uncapped exemption may lead to distortionary incentives for high levels of housing wealth to be sheltered from the means test. We set up a life-cycle model with explicit housing choice and borrowing constraints to match some key features of the Australian economy. We find that abolishing the exemption of owner-occupied housing in the assets test increases aggregate output, capital accumulation, and welfare, but decreases housing investment and homeownership. However, removing such distortions does not necessarily imply that all households would be better off. Lowering taxes to maintain fiscal balance would result in wealthy households experiencing a large welfare loss, whereas the majority of the population would benefit.

Poverty Target Programs for the Elderly in India with Special Reference to National Old Age Pension Scheme, 1995

This paper looks into various aspects of the old age pension debate and related policies in India. In the analysis that follows, we address issues such as: the identity of the drivers of change; the political context in which many of these policies emerged; the intrinsic relationship between poverty and old age problems; state ideology; and the design and implementation of related policies.

An Evaluation of the Poverty Reduction Impact of the Non-Contributory Old Age Pension Programme in Lesotho: The Case of Manonyane

In November 2004, the government of the Kingdom of Lesotho introduced a non-contributory old age pension scheme. This paper investigated the impact of the old age pension on poverty reduction among 215 beneficiaries and their families in Manonyane, Maama Constituency. Results of the analysis revealed that both the incidence and severity of poverty among the elderly declined with headcount ratios of 0.7 and 0.9 with and without the programme, respectively. Similarly, the total poverty gap was computed as M13 626 and M26 194 with and without the programme respectively. Further evidence from logistic model revealed that household size and income were statistically significant in influencing the probability of households getting out of poverty.

Social Expenditure and Poverty Reduction in the Eu15 and Other OECD Countries

The European Union coordinates and encourages Member State actions to combat poverty, and to reform their social protection systems on the basis of policy exchanges and mutual learning (‘best practices’). Some EU countries are more effective in poverty reduction than others. What can explain these variations in effectiveness? This paper analyzes the effectiveness of social transfers in alleviating poverty. We focus on EU15 countries, but also include other OECD countries in our analysis. We compare poverty rates at the levels of market and disposable incomes, that is before and after transfers, in order to analyze the effect of tax and transfer policies in reducing poverty, i.e. to determine the target efficiency of social transfers. We perform several tests with the most recent data (LIS, OECD, SOCX, and Eurostat: ECHP/EU-SILC). Finally, we perform several partial analyses by disaggregating poverty rates to socioeconomic and demographic conditions in order to investigate to what extent variations at the social program level (such as old age pensions, child benefits) affect the measured effectiveness of the welfare state in alleviating poverty. Empirical results draw heavily on how pensions are treated - as primary income or as transfer. We find a strong relationship between levels of social spending and antipoverty effects of social transfers and taxes across EU15 countries. Social spending seems to be an important determinant of a country’s poverty outcome, especially among the elderly, when pensions are considered as transfers. Our analysis highlights some cross-country differences in targeting of social expenditures on poverty alleviation in EU15 and non-EU15 countries around 2005. We introduce an indicator of Public Policy Effectiveness on Poverty Alleviation across countries. Each percentage point of social expenditure alleviates poverty in both EU15 and non-EU15 countries by .7 percentage points on average. Relatively high scores in EU15 countries are found for Ireland and Scandinavian countries, while Italy, Greece and Spain score lowest. Outside Europe the poorest scores are reported for Korea and the USA. Country ranking appears to be rather stable over time when outcomes for 1995 and 2005 are compared, although some of our results may be sensitive to cyclical factors. Finally, we analyzed poverty among vulnerable age groups. Our results show that family programs and child support alleviate poverty among children to a large extent, especially in non-EU15 countries. For public and private old age pension and survivors schemes we find no effect on poverty in case pensions are considered as transfers (both in EU15 and non-EU15 countries). However, this picture changes completely when pensions are counted as transfers. In that case the poverty rate among elderly in EU15 falls from 90 to 21 percent through taxes and social transfers!