Benefits and Costs of Social Pensions in Sub-Saharan Africa
The lack of efficient social security systems, the presence of large informal sectors, and the pace at which the population is aging in some Sub-Saharan African countries are red flags warning of a potential long-term problem: that is, the inabilit...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/07/26602949/benefits-costs-social-pensions-sub-saharan-africa http://hdl.handle.net/10986/24945 |
| Summary: | The lack of efficient social security
systems, the presence of large informal sectors, and the
pace at which the population is aging in some Sub-Saharan
African countries are red flags warning of a potential
long-term problem: that is, the inability of countries to
provide old-age income security to all. Many adults in the
region have difficulties accessing health care and other
essential services, increasing their vulnerability and their
likelihood of becoming impoverished as they age. Since the
coverage of contribution-based pension schemes has remained
low for decades, direct cash grants (henceforth, universal
social pensions) are increasingly proposed as a way to
address the coverage gap and to fight poverty among the
elderly. This paper explores the role of universal social
pensions in 12 Sub-Saharan African countries, showing that
they may be part of the answer to the coverage gap in
pensions and may be important from a human rights lens.
However, they have limited impact on poverty because a
significant share of the elderly population is found not to
fall into the poorest and most vulnerable segments of
society. Universal social pensions can also be quite costly,
difficult to sustain in low-income settings, and less
cost-effective at fighting poverty compared to
poverty-targeted cash transfer programs. Implementation
errors are quite prevalent in universal social pension
schemes, contradicting the apparent simplicity of
identifying program beneficiaries. The report’s main
findings are that a discussion of poverty targeted programs
vis-à-vis universal programs is less relevant for
policymakers than how to design and implement a policy or a
mix of coordinated and harmonized policies under a robust
system that allows governments to reach their main
objectives of meeting the basic needs of their most
vulnerable citizens. |
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