Using data from the 2010 Mexican census, we exploit the age and locality population thresholds to identify the effects of the program, which at the time operated only in localities with less than 30,000 inhabitants. We estimate the effect of 70 y Más, an age-conditioned cash transfer program for individuals age 70 and older in rural Mexico, on the labor force participation of beneficiaries and of younger individuals who live with them. Thus, overall, we find that non-contributory pension schemes targeting the poor in developing countries can improve the well-being of poor older adults without having any indirect impact (through potential anticipation effects) on the earnings or savings of future program participants. Very importantly, we also rule out significant anticipation effects that might have been associated with the program transfers.
We also find that the proportion of treated individuals doing paid work is reduced by 20%, with most of these people switching from their former activities to work in family businesses treated households show higher levels of consumption expenditures (on average, an increase of 23%). Exploiting a quasi-experimental design whereby the program relies on exogenous geographical and age cutoffs to identify its target group, we find that the mental health of elderly adults in the program is significantly improved, as their score on the Geriatric Depression Scale decreases by 12%. Drawing on data from Mexico's Adultos Mayores Program (Older Adults Program) - a cash transfer scheme aimed at rural adults over 70 years of age - we evaluate the effects of this program on the well-being of the beneficiary population. The creation of non-contributory pension schemes is becoming increasingly common as countries struggle to reduce poverty. Moving forward, we believe it is necessary to pay much closer attention to the quality of services, particularly in education to the incentives generated by the interplay of some programs, particularly in the labor market to a more balanced intertemporal distribution of benefits, particularly between young and old and to sustainable sources of finance, particularly to the link between contributions and benefits.
However, a more nuanced view shows some worrisome trends. These policies have been widely praised, and we believe they have resulted in substantial improvements in the lives of the poor in the region.
Social spending in Latin America increased sharply. Starting in the mid 1990s, many governments in the region introduced a variety of programs, including noncontributory pensions and health insurance, and cash transfers targeted to the poor.
In this paper, we argue that social policy, including human capital and education, social insurance, and redistribution, need special attention if achievements of the last two decades are to be sustained and amplified. The region has seen improved macroeconomic management and substantial and sustained reductions in poverty and inequality. Long regarded as a region beset by macroeconomic instability, high inflation, and excessive poverty and inequality, Latin America has undergone a major transformation over the last 20 years.
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