Ageing, poverty, and public policy in developing countries: New Survey Evidence

Population ageing is unfolding in developing countries at a much faster rate than it did in developed countries, while poverty, inequality and poor governance constrain public policy responses. There is an urgent need to understand the processes at work and to design and implement appropriate public policy. The paper reviews the contribution that new survey evidence for developing countries is making to an improved understanding of incidence and characteristics of old age poverty and of the role of non-contributory pensions in providing an effective policy response. Paper prepared for presentation at the FISS 13 International Research Seminar on Issues in Social Security ‘Social Protection in an Ageing World’, Sigtuna, Sweden, 16-18 June 2006 Correspondence to: Armando Barrientos, Research Fellow, Institute of Development Studies at the University of Sussex, Brighton BN1 9RE, UK. Phone: +44 (0)1273 678782; Fax: +44 (0)1273 621202. E-mail: [email protected] Population trends confirm that the demographic transition is taking place much faster in developing countries than it did in the current developed countries. Population projections indicate that by the year 2050 there will be 9.2 Africans, 8.2 Latin Americans, and 55 Asians over the age of 60 for every 10 Europeans of the same age group (UN 2002). Many developing countries are handicapped by slow rates of economic growth and economic development, the persistence of poverty and inequality, and accumulated deficits in basic services and governance. As a result, developing countries will not only have a much shorter time in which to establish or strengthen social protection systems to accommodate population ageing, but that they will also have fewer resources to do so (World Bank 1994; HAI 2003). The need to understand the processes at work in order to design and implement appropriate public policies has some urgency. The paper reviews the contribution that new survey evidence for developing countries is making to an improved understanding of incidence and characteristics of old age poverty and to assessing the relative effectiveness of public policy responses. In the last two decades there has been a significant expansion in the collection and availability of household survey data in developing countries, enabling increasingly sophisticated research into the profile and determinants of poverty (Ravallion 1996). It has also supported a growing literature utilizing survey data to examine the socioeconomic conditions of older people in developing countries. More recently, two comparative studies on old age poverty based on household survey data in Latin America and one in Africa have provided, for the first time, regional profiles (del Popolo 2001; Bourguignon, Cicowiez et al. 2004; Kakwani and Subbarao 2005). Concerns with assessing the effectiveness of relevant public policy have led to new survey data being collected specifically on older people. The Comparative Study of Aging and Health in Asia Programme is examining elderly panel surveys for Taiwan (1989-1999), Indonesia (1993-1998), the Philippines (1996-2001), and Singapore (1995-1999). A Study of Pension and Social Security in South Asia collected surveys of older people in India, Sri Lanka, and Bangladesh (Rajan, Perera et al. 2003) with the aim of examining pension 1 See http://aha.psc.isr.umich.edu/.