Abstract:The creation of non--contributory pension schemes is becoming increasingly common as countries struggle to reduce poverty. 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. 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%. 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%). Very importantly, we also rule out significant anticipation effects that might have been associated with the program transfers. Thus, overall, we find that non--contributory pension schemes target to 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.

for providing key inputs and advice for this work, and acknowledge a grant from GTZ for financial support. The authors declare that they have no financial or material interests in the results of this study. The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, the countries they represent, or the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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Abstract:The creation of non--contributory pension schemes is becoming increasingly common as countries struggle to reduce poverty. 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. 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%. 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%). Very importantly, we also rule out significant anticipation effects that might have been associated with the program transfers. Thus, overall, we find that non--contributory pension schemes target to 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.

Abstract:The creation of non--contributory pension schemes is becoming increasingly common as countries struggle to reduce poverty. 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. 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%. 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%). Very importantly, we also rule out significant anticipation effects that might have been associated with the program transfers. Thus, overall, we find that non--contributory pension schemes target to 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.