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Another Brick on the Wall: On the Effects of Non-Contributory Pensions on Material and Subjective Well Being

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  • Bando, Rosangela
  • Galiani, Sebastián
  • Gertler, Paul

Abstract

Public expenditures on non-contributory pensions are equivalent to at least 1 percent of GDP in several countries in Latin America and is expected to increase. We explore the effect of non-contributory pensions on the well-being of the beneficiary population by studying the "Pensiones Alimentarias" program established by law in Paraguay, which targets older adults living in poverty. Households with a beneficiary increased their level of consumption by 44 percent. The program improved subjective well-being in 0.48 standard deviations. These effects are consistent with the findings of Bando, Galiani and Gertler (2020) and Galiani, Gertler and Bando (2016) in their studies on the non-contributory pension schemes in Peru and Mexico. Thus, we conclude that the effects of non-contributory pensions on well-being in Paraguay are comparable to those found for Peru and Mexico and add to the construction of external validity.

Suggested Citation

  • Bando, Rosangela & Galiani, Sebastián & Gertler, Paul, 2021. "Another Brick on the Wall: On the Effects of Non-Contributory Pensions on Material and Subjective Well Being," IDB Publications (Working Papers) 11095, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:11095
    DOI: http://dx.doi.org/10.18235/0003082
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    More about this item

    Keywords

    Poverty; Non-contributory pensions; Mental health; Well-being;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H4 - Public Economics - - Publicly Provided Goods

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