Emma Aguila (RAND Corporation)
02-07-2011, at noon in room 6050 ISR-Thompson.
Non-contributory social security programs have been implemented in at least 15 countries around the world. These are cash transfer programs aimed at poverty alleviation among the elderly population. Previous studies have found that these programs reduce poverty and inequality, while the health effects are less clear. Our study designs and evaluates a new non-contributory social security program in the State of Yucatan, Mexico. This program is for individuals 70 years or over. Eligible individuals are assigned to treatment and control groups and a large array of background variables and outcome measures are collected at baseline and during the course of the experiment for individuals in both the treatment and control groups. In the current paper we provide evidence of the impact of the program based on information collected six months after the implementation of the program in two cities in Yucatan selected for the first phase of the program that has a quasi-experimental design. Even after this short period we find significant treatment effects on labor supply, hunger, medical consumption, and memory. Eligible individuals spend their pension on food, visits to the doctor, and medicines, while sharply reducing labor supply.