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Social Spending and Income Redistribution in Argentina During the 2000s: the Rising Role of Noncontributory Pensions

Author

Listed:
  • Nora Lustig

    (Department of Economics, Tulane University)

  • Carola Pessino

    (School of Government and Executive Director, Centro de Investigaciones y Evaluación en Economía Social para el Alivio de la Pobreza, Universidad Torcuato Di Tella, Buenos Aires, Argentina)

Abstract

Between 2003 and 2009, Argentina's social spending as a share of GDP increased by 7.6 percentage points. Marginal benefit incidence analysis for 2003, 2006, and 2009 suggests that the contribution of cash transfers to the reduction of disposable income inequality and poverty rose markedly between 2006 and 2009 primarily due to the launching of a noncontributory pension program – the pension moratorium – in 2004. Noncontributory pensions as a share of GDP rose by 2.2 percentage points between 2003 and 2009 and entailed a redistribution of income to the poor, and from the formal sector pensioners with above minimum pensions to the beneficiaries of the pension moratorium. The redistributive impact of the expansion of public spending on education and health was also sizable and equalizing, but to a lesser degree. An assessment of fiscal funding sources puts the sustainability of the redistributive policies into question, unless nonsocial spending is significantly cut.

Suggested Citation

  • Nora Lustig & Carola Pessino, 2012. "Social Spending and Income Redistribution in Argentina During the 2000s: the Rising Role of Noncontributory Pensions," Working Papers 1221, Tulane University, Department of Economics.
  • Handle: RePEc:tul:wpaper:1221
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    References listed on IDEAS

    as
    1. Nora Lustig & Carola Pessino, 2012. "Social Spending and Income Redistribution in Argentina During the 2000s: the Rising Role of Noncontributory Pensions," Working Papers 1221, Tulane University, Department of Economics.
    2. Nora Lustig & Carola Pessino & John Scott, 2014. "The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru, and Uruguay: Introduction to the Special Issue," Public Finance Review, , vol. 42(3), pages 287-303, May.
    3. Bosch, Mariano & Guajardo, Jarret, 2018. "Labor Market Impacts of Non-Contributory Pensions: The Case of Argentina's Moratorium," IDB Publications (Working Papers) 4094, Inter-American Development Bank.
    4. Emanuela Galasso & Martin Ravallion, 2004. "Social Protection in a Crisis: Argentina's Plan Jefes y Jefas," The World Bank Economic Review, World Bank Group, vol. 18(3), pages 367-399.
    5. Mariano Bosch & Jarret Guajardo, 2012. "Labor Market Impacts of Non-Contributory Pensions: The Case of Argentina's Moratorium," IDB Publications (Working Papers) 78158, Inter-American Development Bank.
    6. Leonardo Gasparini & Guillermo Cruces, 2010. "Las Asignaciones Universales Por Hijo. Impacto, Discusión y Alternativas," CEDLAS, Working Papers 0102, CEDLAS, Universidad Nacional de La Plata.
    7. Nora Lustig & Carola Pessino, 2014. "Social Spending and Income Redistribution in Argentina during the 2000s: The Increasing Role of Noncontributory Pensions," Public Finance Review, , vol. 42(3), pages 304-325, May.
    8. Leonardo Gasparini & Guillermo Cruces, 2010. "Las asignaciones universales por hijo en Argentina: Impacto, discusión y alternativas," Económica, Instituto de Investigaciones Económicas, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 145-186, January-D.
    9. Leonardo Gasparini & Guillermo Cruces, 2010. "Las asignaciones universales por hijo en Argentina: Impacto, discusión y alternativas," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 145-186, January-D.
    10. Fiszbein, Ariel & Adúriz, Isidro & Giovagnoli, Paula Inés, 2003. "El impacto de la crisis argentina en el bienestar de los hogares," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Social Spending and Income Redistribution in Argentina During the 2000s: the Rising Role of Noncontributory Pensions
      by maximorossi in NEP-LTV blog on 2012-12-05 19:50:07
    2. Social Spending and Income Redistribution in Argentina During the 2000s: the Rising Role of Noncontributory Pensions
      by maximorossi in NEP-LTV blog on 2013-02-27 18:57:19

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    Cited by:

    1. Juan Cruz López del Valle & Caterina Brest López & Joaquín Campabadal & Julieta Ladronis & Nora Lustig & Valentina Martínez Pabón & Mariano Tommasi, 2021. "Fiscal Policy, Income Redistribution and Poverty Reduction in Argentina," Working Papers 158, Universidad de San Andres, Departamento de Economia, revised Aug 2021.
    2. Nora Lustig & Carola Pessino, 2012. "Social Spending and Income Redistribution in Argentina During the 2000s: the Rising Role of Noncontributory Pensions," Working Papers 1221, Tulane University, Department of Economics.
    3. Pedro Moncarz, 2015. "Implicit redistribution within Argentina’s social security system: a micro-simulation exercise," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-35, December.
    4. Giovanni Andrea Cornia, 2020. "Is Rising Inequality Unavoidable in a Globalizing Economy Characterized by Rapid Technical Change?," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(1), pages 39-65, March.
    5. Branko Milanovic & Sean Higgins & Nora Lustig & Whitney Ruble & Timothy M. Smeeding, 2016. "Comparing the Incidence of Taxes and Social Spending in Brazil and the United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62, pages 22-46, August.
    6. Inchauste, Gabriela & Lustig, Nora & Maboshe, Mashekwa & Purfield, Catriona & Woolard, Ingrid, 2015. "The distributional impact of fiscal policy in South Africa," Policy Research Working Paper Series 7194, The World Bank.
    7. Sean Higgins & Nora Lustig & Julio Ramirez & Billy Swanson, 2013. "Social Spending, Taxes and Income Redistribution in Paraguay," Working Papers 1311, Tulane University, Department of Economics.
    8. Nora Lustig & Carola Pessino, 2013. "Social spending and income redistribution in Argentina during the 2000s: The rising noncontributory pensions," Commitment to Equity (CEQ) Working Paper Series 1305, Tulane University, Department of Economics, revised Aug 2013.
    9. Cabrera, Maynor & Lustig, Nora & Morán, Hilcías E., 2015. "Fiscal Policy, Inequality, and the Ethnic Divide in Guatemala," World Development, Elsevier, vol. 76(C), pages 263-279.
    10. Jaime Aristy-Escuder & Maynor Cabrera & Blanca Moreno-Dodson & Miguel Sánchez-Martín, 2016. "Fiscal Policy and Redistribution in the Dominican Republic," Commitment to Equity (CEQ) Working Paper Series 1347, Tulane University, Department of Economics.
    11. Nora Lustig & Carola Pessino, 2013. "Social spending and income redistribution in Argentina during the 2000s: The rising noncontributory pensions," Commitment to Equity (CEQ) Working Paper Series 05, Tulane University, Department of Economics, revised Aug 2013.
    12. Tobias Pfutze & Carlos Rodríguez-Castelán, 2019. "Can a Small Social Pension Promote Labor Force Participation? Evidence from the Colombia Mayor Program," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2019), pages 111-154, October.
    13. Inés Berniell & Dolores de la Mata & Matilde Pinto Machado, 2020. "The Impact of a Permanent Income Shock on the Situation of Women in the Household: The Case of a Pension Reform in Argentina," Economic Development and Cultural Change, University of Chicago Press, vol. 68(4), pages 1295-1343.
    14. Pessino, Carola & Izquierdo, Alejandro & Vuletin, Guillermo, 2018. "Better Spending for Better Lives: How Latin America and the Caribbean Can Do More with Less," IDB Publications (Books), Inter-American Development Bank, number 9152.
    15. Don H. Chamberlain & L. Murphy Smith & Randall B. Bunker, 2016. "An examination of US state pensions by total state expenditures, state budget deficit and red v. blue state," International Journal of Economics and Accounting, Inderscience Enterprises Ltd, vol. 7(1), pages 27-44.
    16. Nora Lustig & Carola Pessino, 2012. "Social Spending and Income Redistribution in Argentina During the 2000s: the Rising Role of Noncontributory Pensions. Extended Version," Working Papers 276, ECINEQ, Society for the Study of Economic Inequality.
    17. Sean Higgins, Nora Lustig, Whitney Ruble, and Timothy Smeeding, 2014. "Comparing the Incidence of Taxes and Social Spending in Brazil and the United States - Working Paper 360," Working Papers 360, Center for Global Development.
    18. Nancy Birdsall, Nora Lustig, Christian Meyer, 2013. "The Strugglers: The New Poor in Latin America?-Working Paper 337," Working Papers 337, Center for Global Development.
    19. Nora Lustig & Florencia Amábile & Marisa Bucheli & George Gray Molina & Sean Higgins & Miguel Jaramillo & Wilson Jiménez Pozo & Veronica Paz Arauco & Claudiney Pereira & Carola Pessino & Máximo Rossi , 2013. "The impact of taxes and social spending on inequality and poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An overview," Working Papers 315, ECINEQ, Society for the Study of Economic Inequality.
    20. Guangrong Ma & Jianwei Xu & Shi Li, 2015. "The Income Redistribution Effect Of China'S Personal Income Tax: What The Micro-Data Say," Contemporary Economic Policy, Western Economic Association International, vol. 33(3), pages 488-498, July.
    21. Sean Higgins & Nora Lustig & Julio Ramirez & William Swanson, 2013. "Social Spending, taxes and income redistribution in Paraguay," Commitment to Equity (CEQ) Working Paper Series 1311, Tulane University, Department of Economics.
    22. Hessel, Philipp & Sayer, Pieter & Riumallo-Herl, Carlos, 2020. "Educational inequalities in disability linked to social security coverage among older individuals in five Latin American countries," Social Science & Medicine, Elsevier, vol. 267(C).
    23. Nora Lustig & Carola Pessino, 2014. "Social Spending and Income Redistribution in Argentina during the 2000s: The Increasing Role of Noncontributory Pensions," Public Finance Review, , vol. 42(3), pages 304-325, May.

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    More about this item

    Keywords

    social spending; benefit incidence; inequality; poverty; Argentina;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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