What Are the Effects of Expanding a Social Pension Program on Extreme Poverty and Labor Supply? : Evidence from Mexico's Pension Program for the Elderly
In 2013, Mexico's Social Pension Program for the Elderly was expanded by changing its eligibility threshold from age 70 to age 65. Using pooled cross-sectional data from Mexico's National Household Income and Expenditure Survey, the exoge...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/949071509368363092/What-are-the-effects-of-expanding-a-social-pension-program-on-extreme-poverty-and-labor-supply-evidence-from-Mexicos-pension-program-for-the-elderly http://hdl.handle.net/10986/28614 |
| Summary: | In 2013, Mexico's Social Pension
Program for the Elderly was expanded by changing its
eligibility threshold from age 70 to age 65. Using pooled
cross-sectional data from Mexico's National Household
Income and Expenditure Survey, the exogenous variation
around eligibility age was exploited to uncover the causal
effects of this expansion on extreme poverty and labor
supply of the newly eligible population, and to explore
potential transmission mechanisms. Applying
quasi-experimental methods, results show that the expansion
of Mexico's Social Pension Program for the Elderly not
only reduced the probability of the elderly being extreme
poor, but it also reduced the extreme poverty gap, and the
extreme poverty severity indexes of the elderly population.
These effects on extreme poverty are generalizable to all
individuals of the treated household. The results suggest
that the expansion of the Social Pension Program for the
Elderly did not have short-term effects on the labor force
participation of the elderly. Accordingly, the analysis does
not find that the program reduced labor income. In contrast
with other impact evaluations of similar programs, the
analysis does not find that the expansion of Mexico's
program had a crowding out effect on domestic or
international private transfers to the elderly. |
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