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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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  • Rosangela Bando
  • Sebastian Galiani
  • Paul Gertler

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

  • Rosangela Bando & Sebastian Galiani & Paul Gertler, 2021. "Another brick on the Wall: On the Effects of Non-Contributory Pensions on Material and Subjective Well Being," NBER Working Papers 28318, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28318
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    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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