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Social Security Coverage Around the World: The Case of China, India, and Mexico (2021)

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Abstract

We describe the current state and recent trends in the landscape of social security programs in China, Mexico and India. A common thread across these countries is the introduction and recent expansion of old-age pension programs with non-contributory components. We use surveys from the family of international Health and Retirement studies (HRS) to analyze trends in the levels and correlates of social security coverage in China, Mexico and India. The most notable development is the increase in public pension coverage for the elderly population. In China, coverage rates for the population aged 70 and older grew from 33% in 2011 to 68% in 2015; and in Mexico from 32% to 55% in the ten years following 2002. In India, average coverage between 2017 and 2019 was 43% (using cross-sectional data), which is higher than earlier reports in 2010. The new programs also caused significant changes on the determinants of coverage in ways that share similarities across countries. Variables such as education attainment, urban status, and a history of employment in the formal sector, were strong predictors of public pension receipt in the earlier survey-waves, but not in the most recent ones for China and Mexico, although in India, these are still significant. However, a strong relationship remains, and is unchanged across time, between those same characteristics and the average income pension amount. Likewise, there are no significant changes between them and receipt of benefits from other social programs. Based on these results, we conduct simulations that show, for example, that even rapid transformation of the labor market or education levels of the population would not radically change the proportion covered by pension programs but would largely increase average pension amounts.

Citation

Perez-Arce, Francisco, Maria Prados, Erik Meijer, and Jinkook Lee. 2021. “Social Security Coverage Around the World: The Case of China, India, and Mexico.” Ann Arbor, MI. University of Michigan Retirement and Disability Research Center (MRDRC, previously Michigan Retirement Research Center) Working Paper; MRDRC WP 2021-439. https://mrdrc.isr.umich.edu/publications/papers/pdf/wp439.pdf

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Paper ID

WP 2021-439

Publication Type

Working Paper

Publication Year

2021