Old-age Poverty Research Articles

Health-related life cycle risks and public insurance

Based on a dynamic life cycle model, this study analyzes health-related risks of consumption and old-age poverty. The model allows for health effects on employment risks, on productivity, on longevity, the correlation between health risks, productivity and preferences, and the financial incentives of the German public insurance schemes. The estimation uses data on male employees and an extended expectation-maximization algorithm. Simulations suggest that health shocks induce average losses in annual consumption of about 10% and account for more than two-thirds of the cases of old-age poverty. Annuity markets that account for differences in the longevity risk by health status can effectively reduce the consumption risks, but only slightly decrease old-age poverty. A policy analysis of minimum pension benefits indicates that a means test mitigates the associated moral hazard problem substantially.

How Social Pensions and Income Contributes to Successful Ageing? A Mixed Method Study

Ageing of global populations is not only a reality in developed countries; it is also becoming a reality in developing countries like the Philippines. Developing countries like the Philippines will need to prepare for the challenges, and also as well as capitalise on the opportunities, brought about by the increasing numbers of older persons. Income and social pensions are important social safety net to address poverty and hunger in old age.

Old-Age Poverty: The Household Perspective; A Microsimulation Approach of Pension Entitlements in Germany

Providing a decent living standard and preventing old-age poverty are the two major challenges of pension insurance schemes. Replacement rates below the poverty line despite many years of contribution represent a major challenge for public pension schemes with respect to the systems 'raison d’etre'. The focus of the present paper turns away from individual perspective and considers household retirement incomes in the light of analysing old-age poverty and designing (minimum) pension policies. Using household survey and administrative data, the paper examines actual needs of pensioner households in relation to the means-tested minimum pension. The simulation results suggest that 56% of those living in couple households would achieve a pension level lower than means-tested minimum pension if they were considered at the individual level. The findings clearly indicate gender discrepancies: households represent a noticeable insurance function. Especially women are better off if old-age poverty analysis integrates other household incomes. The German government intends to implement the Grundrente in 2019. This minimum pension policy entitles individuals who spent more than 35 contribution years to a 10% mark-up on the means-tested minimum pension. The microsimulation analysis also provides important findings regarding the extent of entitled beneficiaries. Whilst 30% of all new pensions would benefit from an individual perspective, after means-testing only 3% at all will meet the conditions of 35 contribution years which strongly questions the target orientation of the Grundrente.

Missing poor and income mobility

Higher mortality among the poor prevents standard poverty measures from quantifying the actual extent of old-age poverty. Whereas existing attempts to deal with the ”missing poor” problem assume the absence of income mobility and assign to the prematurely dead a fictitious income equal to the last income enjoyed, this paper relaxes that assumption in order to study the impact of income mobility on the size of the missing poor bias. We use data on poverty above age 60 in 12 countries from the EU-SILC database, and we compare standard poverty rates with the hypothetical poverty rates that would have prevailed if (i) all individuals, whatever their income, had enjoyed the same survival conditions, and if (ii) all individuals within the same income class had been subject to the same income mobility process. Taking income mobility into account has unequal effects on corrected poverty measures across countries, and, hence, affects international comparisons in terms of old-age poverty.

On the Inequality and Poverty in Old Age

On the Inequality and Poverty in Old Age

Inequality and Poverty across Generations in the European Union

This SDN studies the evolution of inequality across age groups leading up to and since the global financial crisis, as well as implications for fiscal and labor policies. Europe’s population is aging, child and youth poverty are rising, and income support systems are often better equipped to address old-age poverty than the challenges faced by poor children and/or unemployed youth today.

Cognitive functioning among poor elderly persons: evidence from Peru

The recent emergence and expansion of non-contributory pension programmes across low- and middle-income countries responds and contributes to a larger attention towards the population of elderly individuals in developing countries. These programmes are intended to reduce poverty in old age by providing monetary transfers in mean-tested schemes. However, little is known about the most salient characteristics of this population, particularly health outcomes and their relationship with socioeconomic demographics. The aim of this paper is to provide evidence about this relationship in the specific case of cognitive functioning. We exploit the baseline sample of the Peru’s non-contributory pension programme Pension 65 and find significant relationships between cognitive functioning and retirement, education, nutrition, ethnicity and sex.JEL Classification: J14, J24

Superimpose Material Deprivation Study on Poverty Old Age People in Hong Kong Study

Due to a range of shortcomings of income-based measures of poverty in older people, an alternative approach is proposed to counteract those shortcomings. Hong Kong index of material deprivation aims to identify a consensus-based list of goods and services that are necessities in society and to establish that these goods and services are not available due to their lack of affordability. This paper reports on the validation of Hong Kong index of material deprivation based on an approach proposed by Townsend (Poverty in the United Kingdom, Penguin Books, London, 1979) in Hong Kong. Through a survey of 2339 older Chinese people aged 65 and older, we found that a broad consensus regarding the necessities in their daily lives exists and Hong Kong index of material deprivation is a reliable and valid measure of poverty because its reliability and validity is good and acceptable. Finally, we have shown that the overlap between the poor in terms of income and the deprived is moderate and the profiles of those who are core poor (both poor in terms of income and the deprived) are more similar to those who are deprived than those who are poor in terms of income. Hong Kong index of material deprivation index has been developed, which offers a supplementary measure of poverty other than income poor and provides future avenues for improved understandings of poverty in old age.

The Effects of Means-Tested, Noncontributory Pensions on Poverty and Well-Being: Evidence from the Chilean Pension Reforms

Chile initiated in 1981 a privately managed, individual-account pension system that inspired similar reforms in many Latin American countries, and that has been considered as a possible model for Social Security in the United States. After 30 years in place, the Chilean pension system has been criticized for replicating existing inequalities in labor markets and increasing the risk of old-age poverty; for achieving lower levels of coverage; and for providing low pension benefits. Aiming at guaranteeing a minimum level of consumption upon retirement and increasing the incentives to contribute, in 2008 Chile reformed the Pension System, widening the welfare tier and improving the contributory tier through a means-testing scheme. This paper examines the impact of the 2008 Chilean pension on labor supply and well-being, using a version of the difference-in-difference estimator that assesses the effects of the reform through exogenous changes in pension wealth. Using longitudinal data from 2006 through 2012, and a sample of individuals that were not retired by the time of the implementation of the reforms, our preliminary estimates suggest that the pension reforms induced an increase in the probability of working formally, but at least among females, they reduced labor market participation. However, we find limited impacts of the reform on nonlabor outcomes. Besides some improvements in aggregate household expenditures and in measures of subjective well-being measures among males, we do not detect robust changes in health and well-being among individuals near retirement.

Public pensions and unmet medical need among older people: cross-national analysis of 16 European countries, 2004–2010

BackgroundSince the onset of the Great Recession in Europe, unmet need for medical care has been increasing, especially in persons aged 65 or older. It is possible that public pensions...

Designing Cash Transfer Programs for an Older Population: The Mexican Case.

Aging populations and the prevalence of poverty in old age have led to the introduction of noncontributory pensions in many countries. We consider a number of alternative targeting approaches and simulate their effects in an empirical application in the State of Yucatan, Mexico. We compare the approaches with respect to leakage, under-coverage, and their effects on government budgets. We are also able to compare the simulated effects of one alternative with the observed effect of a recently introduced demogrant and find that the simulation is a close approximation of the empirical outcomes. We discuss issues of implementation and political feasibility.

Poverty in old age: evidence from Hong Kong

ABSTRACTThe Hong Kong population will age rapidly over the next three decades and the entailing problem of old-age poverty will put the Hong Kong government to test. While the government has been using a solely income-based measurement, the main purpose of this study is to assess poverty rates among Hong Kong's older population in terms of both income and consumption-based measurements by using both relative and absolute concepts of poverty. It also examines the association of socio-economic and household characteristics with elder poverty rates. A two-stage stratified sample design was adopted. A total of 4,306 older adults were personally interviewed in their homes, yielding a response rate of 66.2 per cent. This study contributes to the larger study on poverty in Hong Kong by revealing how income and consumption poverty rates may differ among older adults. Older adults who were both income and consumption poor were more likely to be female, widowed, living alone and to have received less than an elementary school-level education. They possessed very few assets and were most likely financially dependent on family support and welfare payments. To understand fully the economic wellbeing of older adults in Hong Kong, this study proposes that joint distribution of income and consumption poverty can better identify and explain the demographic characteristics of the poor older adults. Implications of the study are discussed based on the neo-liberalist approach that the Hong Kong government has taken in welfare provisions.

Social Insurance Schemes and Income Security Among the Retired People in Zambia in Comparison to Mauritius, Tunisia, Ghana and Bolivia

This paper provides an analysis of the extent to which Social Insurance Schemes in Zambia have provided income security to the retirees. The assessment used the analytical framework proposed by the World Bank in undertaking pension system reforms and policy options. Specifically, the research applied the primary criteria of adequacy, financial sustainability, affordability, predictability, equity and robustness to arrive at conclusions. Further, each of the parameters was assigned indicators to assist in the clear assessment of the schemes in contributing to income security. Based on the information collected on the various indicators, the research established that Zambia’s social insurance schemes have not fulfilled the adequate criterion, are affordable, some are financially sustainable while the others are not, have equity to the extent that income is re-distributed from high earners to low income earners but the re-distribution is not sufficient to result in income security for pensioners, some schemes have predictability while others have partial predictability and are robust to some extent based on experiences with some economic crises which have not lead to significant negative impacts in relation to schemes in other countries but have inherent risks because of poor governance and lack of a comprehensive social security infrastructure which is critical to withstanding shocks. Based on these considerations, this paper concludes that overall, the social insurance schemes in Zambia have not provided income security to some targeted pensioners (particularly those who had low earnings during their employment) and exposes yet other retirees to the risk of old-age poverty. This conclusion is supported by evidence that there has been progressive increase in poverty among the retired.The report suggests that in order to address the shortcomings of the current social insurance system in delivering the objective of providing income security among retirees or elderly in Zambia, Government should re-design the system through undertaking both systemic and parametric reforms. These reforms relate to the following: (i) providing for an integrated system of contributory and non contributory with a minimum basic pension, home ownership and health insurance, 2 other tiers above NAPSA, introduction and enforcement of minimum requirements and guarantees for service delivery and awareness raising on pensions; (ii) Improvement of regulatory framework for private schemes and capping of administration costs for all schemes; (iii) Introduction of flexibility on coverage of workers with unstable and wage based incomes, automatic indexation mechanisms in line with cost of living and portability of accrued rights across schemes; (iv) Increase government expenditure on the system and adjustment of contributory rates upwards; (v) Improve the good governance framework with strict enforcement to ensure client centered service delivery and improvement of investment management policies.

The Future of Pensions: Reforms and their Consequences – Introduction

Origins of pension systems Relatively generous provision of incomes for old people is among the main achievements of modern westernised economies. Historically, the state entered and expanded the market for pension provision in order to eliminate old-age poverty and to overcome diverse types of market failures. However, since pension budgets have been increasingly challenged by demographic and financial developments, governments around the world have been reforming their pension systems. This special issue sheds light on the origin, design and potential consequences of pension reform – with a special focus on the UK and Germany. Before turning to the structure and reforms of specific pension systems, we first discuss reasons for why governments should engage in pension provision in the first place. As the basis of this analysis we utilise the standard framework that identifies five rationales for state intervention (Diamond, 1977): market failure, paternalism, redistribution, revenueraising and administrative efficiency.

International movement to promote human rights of older women with a focus on violence and abuse against older women

Population ageing around the world has drawn increased attention to the issue of human rights of older people. Extended old age is a women’s issue, considering women’s longevity advantage over men. Gender inequalities across the life course often make women more vulnerable to violence, abuse and poverty in old age than men. The human rights framework provides a solid foundation to approach the issue of violence and abuse against older women. This article critically reviews the United Nations instruments, with a focus on the international movement to promote human rights of older women, and provides implications for global social work practice.

The Ageing of the Population in Developed Countries – the Economic Consequences in the Czech Republic

IntroductionOne of the tasks of economic sciences is the endeavour to estimate the economic consequences of current development trends on the future - among other things, on the forthcoming living standard of inhabitants, but also on issues of cooperation among individuals, corporations, states and continents. A truly fundamental trend at the turn of the 20th and 21st century is the of the population in developed countries. In the following text, we will attempt to explain certain consequences of this development and make certain deductions which attempt to describe the probable impacts of this on economic systems which we usually label as democratic and market, based on private ownership.For this reason, we define the term ageing per se in the way it will subsequently be worked with in the text, i.e. not as an individual question, but as a social and, understandably, an economic problem.In order to be able to express the question of ageing as a crucial question of future economic development, it is necessary at least partially to deal with certain traditional concepts of collisional situations of economic development in the next decades. In respect of the fact that it is not the aim of the work to refute or confirm this theory in the given context, but only to set it into the correct context with the theme, we can assert after a relatively general analysis of the problem that, from the perspective of current knowledge, the of the population is truly the main problem of the world economy of our century.A decisive aspect of the problem of the ageing of the population in the 21st century is not the danger of inhabitant decline on a global scale; in this sense, there is no reason not to believe expectations that the population as a whole will increase to a level higher than ten billion people (from the current approximately seven billion) within the next decades. The decrease of numbers of inhabitants will, however, concern developed countries, despite considerable migration. Most importantly, however, a fundamental generational change of the population will occur, the impacts of which will be extremely broad on the economy. We will attempt to describe them at least schematically in the environment of the Czech Republic - for instance, for the area of industrial production or for the area of education.1. The issue of ageingEurope is overall and it is threatened by a real reduction of the original population and the national and cultural definition thereof. This fact is irrefutable; it is practically pointless to prove it statistically. Journalists (e.g. Steyn, 2006), demographers (e.g. Arltova, Langhamrova, 2010; Fiala, Langhamrova, 2009, 2010), sociologists (e.g. Scholefield, 2001) and, last but not least, we too (Smrcka, Arltova, 2012; Arltova et al., 2013) have drawn attention to this issue for several years. As Mark Steyn precisely put it, we are living in a time when children are decreasing faster than oil. The problem, however, is for the most part viewed from the political, cultural, often religious, social, sociological or anthropological perspectives. These approaches have appeared in various constellations, for instance at the close of the First and Second World Assembly on Ageing in Vienna in 1982 (United Nations, 1982) and in Madrid in 2002 (United Nations, 2002). Only exceptionally, however, is it viewed as a highly economic issue, and if so, then rather in connection with the problem of poverty in old age (Walker, 1981; Phillipson, 1991), or in connection with the necessity to reform pension systems (Pinera, 2001; Peterson, 1999; Van der Noord, 1993; World Bank, 1994). Only singly is the matter treated from the perspective of the problem of and inter-generational exchanges of information, experience and skills.As it is known, the concept of ageing generally has a clearly defined individual significance. In dependence to the number of years passed from the birth of an individual, population path from birth to death marks a certain phase. …

Demographic trends and age structural change in Arab countries: selected indicators

This statistical file is based on the Population and Development Report 6: Development Policy Implications of Age–Structural Transitions in Arab countries, issued by the United Nations Economic and Social Commission for Western Asia (Beirut, ESCWA, 2014) in the light of the growing demographic challenges facing the Arab countries, resulting from age–structural transitions that affect the process of development, in both the short- and long-terms. The report assumes that the Arab countries are undergoing a shift from high to low rates of mortality and fertility; as a result, some countries have entered a demographic ‘window of opportunity', and several others will soon enter this stage. The ‘window of opportunity' is a period when the working-age population (aged 15–64 years) grows faster than either the population of children (aged 0–14 years) or older persons (aged 65+ years), shifting the balance of the population from high levels of dependency to high levels of potential workers. This shift in age structure in turn creates the potential for Arab countries to benefit from a ‘demographic dividend', namely ‘increased economic productivity, savings, and human capital development' (ESCWA 2014, 3). The report, however, affirms that the ‘demographic dividend' is not an automatic benefit. It necessitates the adoption of reforms that enable Arab governments to make use of the time-limited demographic opportunity. Otherwise, challenges such as ‘youth unemployment and alienation will persist, while new problems of old-age poverty will be exacerbated in the future' (viii). In view of the above, this statistical file presents selected demographic figures that might be useful for following up on the age–structural changes in Arab countries and to assess government policies that would serve the needs of different age groups.

Sociální role chudého stáří

The article deals with poverty in old age, which the author studies through the concept of social roles or social status. She analyses data from a qualitative empirical study in order to understand how various aspects of poverty in old age and the status of being poor impact seniors' performance of social roles. The author approaches poverty and old age as stigmas and looks at the ways in which seniors living in poverty defend their identity against inferior status. The article explains how the role of a poor senior is performed, whether and how poverty affects the roles that poor seniors share with other seniors, and whether the ascriptive status of old age or the objectively low social status of poverty is more significant for the performance of their role. Drawing on the results of her analysis the author describes poverty as the 'master status': poverty is an undesirable status for seniors and strategies for defending their identity against the stigma of poverty pushes the strategies of defence against the stigma of old age into the background. The author argues that setting old age in the context of poverty reveals the limitations of some theories in the fi eld socio-gerontology.

Public Pensions as the Great Equalizer? Decomposition of Old-Age Income Inequality in South Korea, 1998–2010

ABSTRACTThis study examines the redistributive effects of public pensions on old-age income inequality, testing whether public pensions function as the “great equalizer.” Unlike the well-known alleviating effect of public pensions on old-age poverty, the effects of public pensions on old-age income inequality more generally have been less examined, particularly outside Western countries. Using repeated cross-sectional data of elderly Koreans between 1998 and 2010, we applied Gini coefficient decomposition to measure the impact of various income sources on old-age inequality, particularly focusing on public pensions. Our findings show that, contrary to expectations, public pension benefits have inequality-intensifying effects on old-age income in Korea, even countervailing the alleviating effects of public assistance. This rather surprising result is due to the specific institutional context of the Korean public pension system and suggests that the “structuring” of welfare policies could be as important as their expansion for the elderly, particularly for developing welfare states.

Aging worlds in contradiction: gerontological observations in the Mediterranean region

This article discusses the existing and developing aging regimes in the Northern and Southern rim countries of the whole Mediterranean region which are all undergoing considerable social and political transformation processes. It is argued that several eye-opening theoretical interventions for such a gerontological project may lead to some methodological problems and pitfalls, which have to be dealt with productively. Central collective concepts of such an analysis (as the change-oriented “modernization effects” of societal aging and the continuity-oriented gaze at the “unity of the region”) have to be reconsidered and ought to be more differentiated in order to allow smaller social entities (such as kinship and community systems and their connectivity) to be central orientations for analyzing poverty and care management in old age in the Mediterranean region. How to reconnect such a rather micro-political agenda with large processes and big structures of aging policies in the region however still remains an open question.