May 28, 2014 | Poverty & Equity
By Larry Willmore, IIASA Research Scholar
Until recently, all old-age pensions in Mexico were earnings-related, financed with government subsidies and payroll taxes. For this reason only 22% of older Mexicans had pensions in the year 2000. By 2013, thanks to social pensions, coverage had risen to 88%. Social pensions are non-contributory benefits, which do not require a record of employment or contributions to a retirement scheme.
An elderly woman sells flowers on the street of San Miguel de Allende, Mexico
In a new paper published by HelpAge International, a London-based charity, I chronicle the rise of social pensions in Mexico, and discuss what remains to be done.
The rise in pension coverage began in 2001, with the introduction of a universal pension for residents of Mexico City (the Federal District) aged 70 and older. The scheme was extremely popular, and the governor, Andrés Manuel López Obrador, left office with high approval ratings. He left to campaign for the presidency, promising to extend universal pensions to the rest of the country. He was the only candidate to support a social pension in the 2006 presidential race. Although the promise of a universal pensions resonated with voters, Mr López lost narrowly to Felipe Calderón, who disliked social pensions in general, and universal pensions in particular.
Despite President Calderón’s opposition to social pensions, members of Congress were able to launch a universal 70 y más pension scheme, providing monthly benefits of MX$500 (US$45) for rural Mexicans aged 70 and over. In January 2012 the unthinkable happened – Calderón in his last year of office extended the 70 y más scheme to urban Mexico. The target population (rural and urban) increased from 2.0 to 3.5 million, even though the program now excluded those with earnings-related pensions, so was no longer universal.
In the meantime, 17 of Mexico’s 31 states had followed Mexico City’s lead by introducing social pensions on their own. The federal entities that introduced social pensions are diverse, and have little in common in terms of health, education, income or coverage by earnings-related pensions. Sub-national schemes also vary significantly in terms of coverage and benefit level. Interestingly, the only two federal entities to introduce universal pensions were, respectively, the most developed (Federal District) and the least developed (Chiapas).
By 2012 social pensions in Mexico had shifted from a marginal political issue supported by a single political party, to one supported by the presidential candidate of each major party. Enrique Peña Nieto promised to lower the age of eligibility from 70 to 65 years. He won the election and, on assuming office, immediately extended social pensions to those aged 65-69 while continuing to exclude recipients of an earnings-related pension.
Mexico has moved quickly from limited to near universal pension coverage, but progress is urgently needed in three areas:
- Pension coverage is incomplete. Nearly one million older people have no pension. They should be added to the social pension registry as soon as possible.
- The social pension currently covers only half the cost of food needed for bare subsistence. It should be doubled immediately, to reach the extreme poverty line.
- The social pension should be extended to those with an earnings-related pension, restoring the ideal of a universal pension. Without universality, it will be difficult, perhaps impossible, to increase the size of Mexico’s social pension to the extreme poverty line or higher.
Reference
Larry Willmore (2014). Towards universal pension coverage in Mexico. Pension watch briefing no. 13, HelpAge International, May 2014. http://www.helpage.org/download/537ccce61a7b6
Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
Nov 27, 2013 | Demography, Poverty & Equity
A new study by IIASA researchers Katie Bowen and Vegard Skirbekk examines the stereotypes people have about older people, and what factors influence those views across a number of countries. In this interview Bowen describes the new findings and their implications.
The new study shows a connection between the proportion of older people who work or volunteer in a society, and the broader perception of their competence.
Why did you decide to examine perceptions about older people’s competence?
A common stereotype about older people is that they are rather incompetent, that is, that people over a certain age are slower, out-of-date, less able to learn and generally less able to perform tasks in everyday life. However, the extent to which older people are viewed as incompetent varies across countries: In some countries older people are regarded as more competent, and in other countries older people are regarded as less competent. We wanted to know if there was a connection between national stereotypes of older people’s competence and the roles older people fulfill within a certain society.
Since employed people tend to be perceived as being particularly competent, we thought that there might be a connection between the proportion of older people working—paid or unpaid—in a country and the extent to which older people in general are perceived as competent.
What did you find?
Our results indicate that older adults are indeed seen as more competent in countries in which more older people work and volunteer. Importantly, our results suggest that the proportion of older people working and/or volunteering is related to stereotypes of older people’s competence over and above the actual competence of the older population. We had no indication that it matters whether older adults are participating in paid or volunteer work.
Besides people’s volunteer or work participation, what other factors could explain the relationship between stereotypes about older people’s competence and the proportion of older people working or volunteering and how did you control for these factors?
Being older means different things in different countries. For instance, the health of the older population, as for instance roughly indicated by average life expectancy, varies significantly across Europe. Another example is education: in some countries, the older population is highly educated, whereas in some countries the older population has only limited formal education. As a third example, since women tend to live longer than men, women tend to make up a larger part of the older population, although this varies across countries. Finally, research has shown that the objective cognitive performance of the older population also varies significantly across countries.
All of these factors—health, education, gender, and cognitive performance—are also linked with perceptions of competence. For instance, men tend to be perceived as more competent than women, healthier people tend to be perceived as more competent, and so on. It could be that national stereotypes about older people’s competence reflect ‘real’ differences in the competence of the older population as captured by the educational level, health, and cognitive skills of the older population, or that differences in perceptions of older people’s competence are mixed up with stereotypes about women’s competence. Furthermore, at least in some countries, working and volunteering older people tend to be healthier, more educated and more cognitively fit relative to their non-working/volunteering peers. It was therefore important to try to separate out the extent to which national stereotypes of older people’s competence were related to the health, education and cognitive fitness of the older population versus the participation of older people in roles that allow them to demonstrate their competence.
In our new study, we did this by statistically controlling for average life expectancy, education level of the older population, and proportion of women within the older population in each country. In a subsample of countries, we were also able to control for the average objective cognitive skills of the older population. When we controlled for these factors, there was a clear link between the proportion of older people participating in paid and/or volunteer work and national stereotypes of older people’s competence.
What methods did you use to conduct the study?
We used data from the 2008 European Social Survey (ESS). The ESS includes data from representative samples from 28 countries regarding perceptions of older people’s competence. We analyzed the data with a multi-level regression model. As our dependent variable, we used data from 43,376 individuals aged below 65 years, who indicated the extent to which older people in their country are perceived as competent. We used data from the ESS and other sources like the OECD for information on the participation of older people in paid and/or volunteer work, as well as average education of the older population, the gender ratio of the older population, and the average life expectancy in each country. For a subsample of 11 countries, we had data on the average cognitive abilities of the older population in each country from the SHARE study.
Were there any surprises in your results?
Well, Hungary was a bit of an outlier. According to our data, there are very positive perceptions of older people’s competence in Hungary which are not well explained by the characteristics of the older population which we included in our model.
Why are the results of this study important for society?
Our study shows that the opportunities that older people have for participating in a society really matter. Paid and volunteer work can be an important way for older people to demonstrate their competence. Our results imply that social policies and structural factors at the country level that create opportunities for older adults to participate in work and volunteer roles may contribute to more positive perceptions of older adults’ competence. This matters not only for older people, but also for younger people who form expectations about their own aging based in part on how they perceive older people over the course of their lifetime. Several longitudinal studies have now demonstrated that what you expect from aging is what you get: people with more positive perceptions of aging tend to actually age better.
The takeaway of our study is this: social institutions influence the roles that older people have in society, and roles contribute to how older people are perceived.
“Our study shows that the opportunities that older people have for participating in a society really matter,” says Bowen.
Reference
Bowen, C.E., & Skirbekk, V. (2013). National stereotypes of older people’s competence are related to older adults’ participation in paid and volunteer work. Journals of Gerontology, Series B: Psychological Sciences and Social Sciences, 68(6), 974–983, doi:10.1093/geronb/gbt101. 974983 http://psychsocgerontology.oxfordjournals.org/content/68/6/974.full
About
Katie Bowen is a developmental psychologist interested in understanding how social (e.g., country-level) and individual predictors together influence patterns of adult development. To date her research has focused on images of aging (i.e., mental representations of older people and the aging process), aging and the work context, and adult personality development.
Bowen joined IIASA’s World Population (POP) program in November 2013, to research social and individual predictors of longevity preferences.
Note: This article gives the views of the interviewee, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
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