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ho are w orking in agricultural or construction sectors. Surprisingly, the results reveal that giving pensions to unemployed elderly do not result in a pro-poor outcome. These conclusions generally hold for both the 1994 and 1997 years. TABLE 6.3 Pro-Poor Policy index for universal pension to vulnerable groups of elderly Targeting 55 years & over 60 years & over 1994 Elderly living alone 0.40 0.43 Widowed elderly 0.87 0.87 Subsistence farming elderly 1.32 1.35 Pastoralist elderly 1.69 1.73

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POVERTY, OLD-A G E A N D SOCIA L PEN SION S IN KEN YA &lowast; Nanak Kakwani,&lowast;&lowast; H yun H . Son&lowast;&lowast; and Richard H inz&lowast;&lowast;&lowast; A BSTRA CT This study is concerned with old-age poverty in Kenya. It is also concerned with strengthening and developing social pension program s for the elderly. In this study, we develop precise socioeconom ic and dem ographic profiles of the elderly in Kenya from the viewpoint of providing policy-m akers with inform ation that m ay be useful in the reform and expansion of the

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large, and poverty rates of the elderly increased between 1994 and 1997, the period for which there is household survey data available. In 1994, 44% of persons over the age of 55 reported incom es below the official poverty lines com pared to 37% of the total population. The differential is even greater than these num bers suggest because the elderly are included in the overall num bers. In 1997, the poverty rate for the elderly was nearly 50%, com pared to 45% overall. In addition, the severity and depth

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national incom e would cost about 1% of G D P. Expanding this to 50% of per capita G D P would raise the cost proportionally to just above 2% of G D P. This represents a sizable but feasible portion of current tax revenues that are now just above 20% of G D P. If a pension program provided cash transfers to all elderly 55 years old and over, there would be about 1.5 and 1.7 m illion beneficiaries in 1994 and 1997, respectively. Such a program would have a m ajor im pact on poverty rates and levels for the

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Nanak Kakwani, H yun H . Son and Richard H inz 7 countries to strengthen and develop social protection policies and program s in response to econom ic crises and rising vulnerability am ong the elderly (Asian D evelopm ent Bank 2001, W orld Bank 2001, United Nations 2002). The initial step in assessing an appropriate design and im plem entation path for the potential enhancem ent of the social protection system in Kenya to address the prevalence and consequences of old age poverty is to

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14 International Poverty Centre W orking Paper nº 24 2.7 PO VERTY SIM ULATIO N The study sim ulates several alternative designs of a non-contributory social pension system for the elderly. These are intended to illustrate the relative effects of alternative program design and associated costs on poverty reduction. O utcom es are estim ated not only for the elderly, but also for national poverty. To evaluate the potential im pact of a social pension, several alternative designs for such a

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Nanak Kakwani, H yun H . Son and Richard H inz 17 For instance, the Central province is dom inated by com m ercial farm ers. This feature of the province can be attractive for both retirees starting com m ercial farm ing and for elderly seeking for em ploym ent. O n the other hand, Nyanza province has a high percentage of subsistence farm ers. Pastoralism is prevalent in certain districts in the Rift Valley, Northeastern and som e parts of the Coastal and Eastern provinces. Pastoralist

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livelihood opportunities. In this context, pensions for the elderly could be of great im portance. Pension incom e is usually likely to be pooled within households, and younger m em bers have been dem onstrated to benefit from it. Table 3.7 illustrates one of the m ain effects of elderly caring for children by exam ining the school attendance of children from elderly headed households. School-age children are defined as those aged between 6 and 17, which corresponds to the current Kenyan education system

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20 International Poverty Centre W orking Paper nº 24 children living in other households. This suggests that children living in elderly headed households suffer greater financial hardship compared to those living in non-elderly ones. “O ther” as a reason other than the specific six reasons, is the next highest cause after fees cited by the children for not com pleting the education cycle. The children who responded no interest as a reason for not attending school is also significant, at 8.8 percent

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private dispensaries. For those under 60, the m ost frequent action when sick is also to visit a pharm acy (74 percent), followed by consulting a dispensary (12.4 percent). Attending a health centre or hospital is m ore com m on for the non-elderly group com pared to the elderly one. The 1994 W M S show s that nationally, 10.16 percent of the elderly over 60 w ho are sick do not receive treatment. The corresponding figure increased to 19.10 percent in 1997. For the w hole population, the figures for not

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Nanak Kakwani, H yun H . Son and Richard H inz 27 FIGURE 4.4 Literacy status of elderly pensioners 74.5 25.5 79.1 20.9 74.1 25.9 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 All pensioners Pensioners 55 & over Pensioners 60 & over Literate Illiterate Source: Authors’ calculations based on the 1994 W M S. 4.4 PENSIO NERS LIVING W ITH CH ILD REN In Kenya, the m ajor roles of older people can be identified as: child care givers for em ployed fam ily m em bers with children; and care

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the asset ownership of those without access to pensions. The results reveal that elderly-headed households with pensions tend to own large land parcels, and it was observed that m ost households own no land or little land, seriously disadvantaging their ability to earn a livelihood. Land holding is defined as land owned or operated by a household used either for crops or livestock rearing. In terms of mean land holding size, the difference betw een the elderly-headed households w ith and w ithout

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in Kenya. The elderly without pensions tend to have m ore access to cars than their counterpart elderly. Radios and TV sets are m ore com m only owned assets com pared to assets like cars. This m ay not only be a reflection of affordability, but also the practicalities of daily life. O n average, elderly having access to pensions own m ore radios and TV sets than those without pensions. In the case of life insurance, 2.89 percent of the population in 1994 had life insurance. O f the elderly, there is a

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pensions, a higher proportion of elderly-headed households w ith pensions have access to safe sanitation and electricity. These findings suggest that elderly-headed households receiving pensions tend to have a better quality of living standards than those w ithout pensions. O n the whole, the lim ited pension system of Kenya appears to provide a m eaningful source of incom e support for the sm all proportion of elderly persons that receive benefits. Those who report pension receipt indicate far better

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current pension system for form al sector workers, although sm all, is reaching persons within the lowest incom e groups. 5.2 PENSIO NS AND TH E PRO BABILITY O F BEING PO O R As a second step in identifying the im pact of current pension incom e on poverty a probit m odel was developed to evaluate the determ inants of the probability that a household m em ber living in a household headed by an elderly person will be poor. A m ultivariate setting enables the identification of the im pact of having a

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This study has also calculated the PPP index in the hypothetical case of a universal pension program for the elderly. Suppose that every elderly person over 55 or 60 years old receives a non-contributory pension from the governm ent. Is this scenario likely to be m ore pro-poor than the actual pension program ? Using both the 1994 and 1997 W M S, Table 6.2 attem pts to seek the answer to this question. TABLE 6.2 Pro-Poor Policy index for universal pensions to elderly living in rural and urban areas

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ho are w orking in agricultural or construction sectors. Surprisingly, the results reveal that giving pensions to unemployed elderly do not result in a pro-poor outcome. These conclusions generally hold for both the 1994 and 1997 years. TABLE 6.3 Pro-Poor Policy index for universal pension to vulnerable groups of elderly Targeting 55 years & over 60 years & over 1994 Elderly living alone 0.40 0.43 Widowed elderly 0.87 0.87 Subsistence farming elderly 1.32 1.35 Pastoralist elderly 1.69 1.73

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in Table 6.4. If a pension program had been designed to reach elderly 55 years old and over, there would have been m ore than 1.5 and 1.7 m illion beneficiaries in 1994 and 1997, respectively. O f those, 93-94 percent cam e from rural areas in that period. If the coverage of the pension program was reduced, the num ber of beneficiaries would be expected to fall. This is the case for a pension schem e, if designed for those older than 60. In com puting pensions given to each beneficiary, we should

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pensions. The results show that such a universal pension schem e would have cost 1.16 and 1.38 percent of G D P in 1994 and 1997, respectively. As expected, when eligibility is reduced to elderly over 60, costs fall to less than 1 percent of G D P per capita in both periods. For com parison, in India, the total expenditure on various safety net program s including old age pensions am ounted to 1.5 – 2 percent of G D P. Brazil, Nam ibia and South Africa spend 1, 2, and 1.4 percent of G D P, respectively, on

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42 International Poverty Centre W orking Paper nº 24 show s, a given level of pension w ould have a more significant impact on poor individuals living far below the poverty threshold rather than those clustered around the threshold. This point is further highlighted w hen it comes to poverty among elderly. Finally, as expected, the pension transfer leads to substantial reduction in poverty among elderly and also in non-negligible poverty reduction for children under 15 (at the national level

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provides som e prelim inary assessm ent of several key issues that should be included in the consideration of approaches to expand and reform the pension system . The policy analysis is prim arily directed at evaluating the costs, design and projected outcom es of providing a universal “dem ogrant” type social pension that would provide basic subsistence benefits to citizens reaching a specified retirem ent age. This review of the status of the elderly in Kenya indicates a pressing need for som e expansion

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the poverty line com pared to 45% of all children. Children in the care of the elderly indicate m uch lower rates of school attendance. D espite the greater risk and associated social consequences of the low econom ic status of the elderly, the form al pension system in Kenya rem ains very lim ited. O nly 3.1% of people over the age of 55 in 1994 reported the receipt of any pension incom e and 90% of these recipients were m ale. The lim ited data precludes any ability to determ ine patterns for the

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Nanak Kakwani, H yun H . Son and Richard H inz 45 The analysis also suggests that due to the prevalence of poverty am ong the elderly, there will be lim ited gains from m eans testing such a system relative to providing benefits for all at a specified age. Several of the m ain design param eters of such a system can be considered in the context of basic inform ation on incom e distribution and poverty levels derived from the household data. The key threshold question of affordability can be

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Ageing and poverty in africa and the role of social pensions

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are statistically significant in 11 countries. TABLE 4 Income shortfall from the poverty threshold for different household types, as percent of average income short fall (poverty gap) for the country as a whole. Country No Elderly Persons Elderly Persons Only Elderly & Children Only Not Headed by Elderly Headed by Elderly All Persons Burundi 100 154 143 100 100 100 Burkina Faso 100 113 116 100 99 100 Cote d'Ivoire 93 213 224 95 121 100 Cameroon 99 151 107 97 112 100 Ethiopia 98

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2 International Poverty Centre Working Paper nº 8 Drawing on household survey information, the study has delineated the profile of the elderly for 15 African countries which include both East and West African countries, and countries with a high and low prevalence of HIV-AIDS pandemic. The findings show much heterogeneity across countries with respect to the proportion of the elderly population, the living arrangements and the composition of households, and household headship. The variations in

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Nanak Kakwani and Kalanidhi Subbarao 3 While categorical targeting of a pension for the above groups yields the maximum poverty reduction impacts, and is also fiscally sustainable even in low income countries, its operational feasibility is considered to be weak. Moreover, targeting a social pension for such specific groups among the elderly is most likely to lead to adverse incentive effects and possible induced changes in household types in order to claim a pension. Bearing this mind, two

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4 International Poverty Centre Working Paper nº 8 African countries is delineated in section IV. Three aspects of welfare are discussed: poverty incidence, poverty gap ratio, and sickness and access to healthcare. In section V the implications for poverty reduction of a social pension to the elderly under alternative targeting options are analyzed. In particular, it will examine the short run impacts of providing assistance to the elderly (living in diverse household settings) to a reduction in

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Nanak Kakwani and Kalanidhi Subbarao 5 children, the disabled, chronically food insecure households, etc. , the prospects for the elderly deserve a little more attention than was possible in the Risk and Vulnerability Assessments largely because of the changing demographics, HIV-AIDS pandemic, the pace of urbanization and the gradual emergence of nuclear families – all contributing to a gradual erosion of the traditional safety net, viz., the extended family. Given that most poor happen to be in

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6 International Poverty Centre Working Paper nº 8 2. Households with only elderly persons 3. Households with only children and elderly persons 4. Mixed households with children, working age persons and elderly 5. Households headed by elderly persons 6. Households headed by working age (15-59) males or females Households in groups 5 and 6 are sub-groups of household group 4. To analyze the poverty status of elderly, we will need a poverty line for each of the 15 countries. The study uses

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the elasticity of total poverty reduction and elderly poverty reduction with respect to different targeting criteria). A detailed methodology is provided in Appendix 1. 4 A PROFILE OF THE ELDERLY IN AFRICA. A. THE SETTING: CHARACTERISTICS OF SAMPLE COUNTRIES The study is based on recent household survey information for 15 low income Sub Saharan countries. Details of the household surveys are provided in the Appendix. Table 1 provides some background information on basic characteristics of these

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the elderly may have become caregivers for children, in which case a household type of “elderly with children” becomes important. Column 4 in Table 2 presents the percentage of population living in such households. The proportion ranges from a low 0.06 percent in Gambia to a high 1.34 percent in Uganda, 1.38 percent in Malawi, and 1.30 percent in Burundi. 5 It is worth noting that the household type “elderly with children” existed even prior to the AIDS pandemic with working age adults migrating to

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generally the main breadwinner in the household.) 6 d. How statistically significant are these difference? Are the patterns similar for the incidence of the poverty gap ratio? These questions are explored below. The results for question (a) above presented in Figure 2.7 In eleven out of fifteen countries, the incidence of poverty among households in which the elderly are living (we call them “mixed households”) is higher than the average; in nine countries the differences are statistically significant

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is exacerbated when they become caregivers for children. In Malawi, Uganda and Zambia, households in which the elderly are living with children is 20 percentage points higher than the average and statistically significant. Question (c) is addressed in Figure 4. In 12 out of 15 countries the incidence of poverty in households headed by the elderly is higher than the average; the differences are statistically significant in 11 countries. An interesting finding is that the “elderly living alone

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proportion of children in poverty, alongside the average for the whole population, and the proportion of elderly in poverty. The incidence of poverty among the elderly and among the children is about the same in most countries; the incidence of poverty among the elderly is more than 5 percentage points higher than that of children in Cote d’Ivore, Malawi and Zambia. On the other hand, the incidence of

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Nanak Kakwani and Kalanidhi Subbarao 13 poverty among the children is more than 5 percentage points than that of elderly in Madagascar, Mozambique and Nigeria. The pattern remains the same even when disaggregated by rural/urban location (tables not presented). The above findings strongly confirm the elderly disadvantage especially when the elderly have become either principal breadwinners for the family, or have become caregivers for children. For most countries the differences between the

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are statistically significant in 11 countries. TABLE 4 Income shortfall from the poverty threshold for different household types, as percent of average income short fall (poverty gap) for the country as a whole. Country No Elderly Persons Elderly Persons Only Elderly & Children Only Not Headed by Elderly Headed by Elderly All Persons Burundi 100 154 143 100 100 100 Burkina Faso 100 113 116 100 99 100 Cote d'Ivoire 93 213 224 95 121 100 Cameroon 99 151 107 97 112 100 Ethiopia 98

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16 International Poverty Centre Working Paper nº 8 D. RURAL/URBAN DIFFERENCES There are clearly significant rural/urban differences. With respect to single elderly persons, a much higher proportion of individuals are poor in rural areas compared with urban areas in every country. (Figure 7) The pattern remains the same for other household types, viz., households with elderly and children, and households headed by the elderly. (The results are not presented.) The relatively higher proportion of

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the elderly. The main purpose is to assess which targeting option makes sense, i.e., yields the maximum possible gains in national poverty reduction, with a given budget and with a given benefit level. The resources required (as per cent of GDP) to eliminate the poverty gap among all elderly women and men and others is shown in Table 6. Compared with the cost of filling the poverty gap for other categories, the cost of filling the poverty gap for elderly men and women is not very high for most

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18 International Poverty Centre Working Paper nº 8 households headed by the elderly – clearly not affordable for most countries. Even to fill the poverty gap among the elderly with children – a small proportion of the population in all countries – the resources required ranged from 0.1 to 0.5 percent of GDP. TABLE 7 Money as % of GDP required to eliminate poverty gap by household type Country No elderly persons Elderly persons only Elderly & children only Mixed households Not headed by

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poverty reduction of targeting social assistance pension to households with elderly and children (columns 4) is higher than what could be obtained by targeting it to the elderly only group (column 2). The poverty reduction impacts of targeting the household type “households with elderly and children” are particularly large in two countries devastated by AIDS, viz., Uganda and Malawi. It is worth noting, however, targeting this particular household type for social pension cannot solve the wider problem of

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household types and poverty status. However, implementing a pension program targeted to specific household types may pose enormous difficulties. The potential for adverse incentive effects can be large. For example, if “single” elderly are targeted for a social pension, it is just possible an elderly person (a grandma or a grandpa) currently living in an extended family household setting might be “kicked out” to fetch a pension. If a household type such as “elderly and children” are targeted, it is just

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1.7 -6.7 -2.2 Kenya -3.0 -2.4 -15.3 -2.8 Madagascar -3.4 -3.0 -26.4 -2.9 Mozambique -1.5 -1.3 -8.9 -1.3 Malawi -1.5 -1.3 -9.5 -1.5 Nigeria -3.1 -2.5 -14.0 -2.7 Uganda -3.3 -2.7 -14.1 -2.5 The simulations also assume that the pension, though delivered to the elderly person, is shared within the household – a realistic assumption in the African context. The poverty reduction impacts of targeting to all elderly persons, all poor elderly persons, are shown in Table 10 (for head count poverty) and

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Nanak Kakwani and Kalanidhi Subbarao 23 Another way to assess the superiority (or lack thereof) of targeting the poor elderly versus all elderly, and various household structures in which the elderly are living, is to compute the targeting indicator (see Appendix for methodology). This is done in Tables 12. If the computed targeting indicator is greater than 1, then the same amount of budget targeted to that group as social pension will result in a greater reduction in national poverty than

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Mozambique 2.92 1.75 1.93 1.15 Malawi 3.13 2.18 2.24 1.55 Nigeria 1.68 0.99 1.00 0.55 Uganda 1.86 1.27 0.97 0.69 Zambia 1.68 1.06 1.33 0.84 One way to make the social pension affordable is to lower the benefit level, means-tested (restricted to the poor elderly), and eligibility restricted to 65+. If one were to fix the benefit level at 35% poverty threshold, the budgetary cost would be exactly equal to one half of the reported results. For example, in Zambia, with a benefit level of one-third of the

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Nanak Kakwani and Kalanidhi Subbarao 25 contributory social pensions for the elderly from a (national) poverty reduction stand point, caution is needed in selecting the right targeted approach while operationalizing a social pension policy.13 TABLE14 Percentage change in national headcount by targeting assistance equal to 70 % and 35% of average poverty line to poor elderly Poor Elderly 60 + Poor elderly 65 + Country Pension = .70% of Poverty threshold Pension = .35% of Poverty

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26 International Poverty Centre Working Paper nº 8 annum in the recent past. This suggests that the fiscal leverage from economic growth is likely to be extremely limited, if not nil, for low income countries of Africa in the medium term, and so the argument that universal social pensions can sustained in a “growth scenario” is tenuous at best. In sum, it appears desirable, in the larger interest of the elderly themselves, to target the pension to the poor among the elderly keeping the age cut off

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28 International Poverty Centre Working Paper nº 8 TABLE 16 Elasticity of probability of female children attending school 7 CONCLUSIONS AND IMPLICATIONS FOR POLICY. The main objective of the study is to delineate the poverty among the elderly in 15 low income Sub Saharan countries and to assess the role of social pensions for the elderly. The study finds that, when defined by household structure, the elderly only, elderly with children, and the elderly-headed households are poorer than others in

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CBPP: Social Security Reduces Proportion of Elderl

Social Security and Poverty Among the Elderly - Embargoed Press Release - 4/8/99 FOR IMMEDIATE RELEASE: Thursday, April 8, 1999, 10:30 a.m. (ET)CONTACT: Robert Greenstein, Wendell Primus, Michelle Bazie, (202) 408-1080 State contacts listed below SOCIAL SECURITY RED...

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K-12 Social Studies

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E: Cultural Development, Interaction, and Change, H: Individualism, Equality and Authority, I: Patterns of Social and Political Interaction) SS:HI:6:5.4: Describe similarities and differences in the immigrant experience for various ethnic groups, e.g., the English or Chinese. (Themes: A: Conflict and Cooperation, E: Cultural Development, Interaction, and Change, I: Patterns of Social and Political Interaction) SS:HI:8:5.1: Analyze how societal changes have influenced the family, e.g

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E: Cultural Development, Interaction, and Change, H: Individualism, Equality and Authority, I: Patterns of Social and Political Interaction) SS:HI:6:5.4: Describe similarities and differences in the immigrant experience for various ethnic groups, e.g., the English or Chinese. (Themes: A: Conflict and Cooperation, E: Cultural Development, Interaction, and Change, I: Patterns of Social and Political Interaction) SS:HI:8:5.1: Analyze how societal changes have influenced the family, e.g

www.ed.state.nh.us/education/doe/organization/curriculum/CurriculumFramew...

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Social Studies Performance Standard E Grade 12

Illustrate and evaluate ways in which cultures resolve conflicting beliefs and practices E.12.12 Explain current and past efforts of groups and institutions to eliminate prejudice and discrimination against racial, ethnic, religious, and social groups such as women, children, the el...

dpi.wi.gov/standards/sse12.html

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Indiana Academic Standards-Social Studies-Grade 6

1 0

and contributions of the Eastern Roman Empire after the fall of the Western Roman Empire. Example: Influence on the spread of Christianity in Russia and Eastern Europe 6.1.4 Describe and explain the development and organization of political, cultural, social and economic systems in Europe and the Americas. (Individuals, Society and Culture) Example: Feudal system, manorial system, rise of kingdoms and empires, slavery, and religious institutions 6.1.5 Analyze the diverse points of view and interests

2 0 http://dc.doe.in.gov/Standards/AcademicStandards/PrintLibrary/docs-socialstudies/2007-ss-grade06.pdf#page=2 dc.doe.in.gov/Standards/AcademicStandards/PrintLibrary/docs-socialstudies...

and contributions of the Eastern Roman Empire after the fall of the Western Roman Empire. Example: Influence on the spread of Christianity in Russia and Eastern Europe 6.1.4 Describe and explain the development and organization of political, cultural, social and economic systems in Europe and the Americas. (Individuals, Society and Culture) Example: Feudal system, manorial system, rise of kingdoms and empires, slavery, and religious institutions 6.1.5 Analyze the diverse points of view and interests

dc.doe.in.gov/Standards/AcademicStandards/PrintLibrary/docs-socialstudies...

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