A role for universal pension? Simulating universal pensions in Ecuador, Ghana, Tanzania, and South Africa

Type Working Paper - WIDER Working Paper
Title A role for universal pension? Simulating universal pensions in Ecuador, Ghana, Tanzania, and South Africa
Author(s)
Volume 23/2018
Publication (Day/Month/Year) 2018
URL https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2018-23.pdf
Abstract
We use four novel, cross-country comparable tax-benefit microsimulation models for Ecuador, Ghana, Tanzania, and South Africa to evaluate ex ante the expansion of a universal old-age pension in a static setting. Universal pensions would significantly reduce poverty and inequality in settings in which no means-tested old-age pensions exist (such as Ghana and Tanzania).
If means-tested old-age pensions exist and shall be maintained, universal pensions as a top-up scheme only make a difference for the income distribution if the existing schemes do not reach the entire vulnerable population, such as in Ecuador. Costs for the proposed schemes are substantial.

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