Cash transfers for the
elderly: to reduce poverty
and stimulate the economy
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Why are cash transfers for the elderly important?
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Global evidence from elderly cash transfers
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A description of ASLURETI beneficiaries
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Impacts of ASLURETI
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Why are cash transfers for the elderly important?
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ASLURETI: An example of a successful elderly cash transfer in
Indonesia
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A description of ASLURETI beneficiaries
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Impacts of ASLURETI
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Global evidence from elderly cash transfers
Early
• Cognitive development reduced
• Miss out on immunization
• No access to ante-natal and post-natal care
• Loss of parental care from bereavement or migration
• Child labour
• No access to school
• Malnutrition
• Loss of parental care from bereavement or migration
• Inadequate skills
• Unemployment
• Inability to access training
• Allienation
• Early motherhood
• Unemployment and
underemployment
• Inadequate wages
• Debt
• Need to care for
children and parents
• No childcare
• Gender discrimination
• Domestic violence
• Increasing frailty
• Inability to work
• No care from family
• Discrimination in labor force
• Limited access to credit
COVARIATE AND HEALTH
SHOCKS
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Key economic challenges of old age:
• Increased challenges to earning an income
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Most older people are part of
complex family and kinship networks
In absence of social protection, older people are often net
recipientsof financial support
and care from children…
…although this support may be limited, and puts financial
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Pension income can allow older people to be net contributors to their families.
• Boosts dignity and
autonomy
• Improves situation of
families
Pensions provide support to wider
family and kinship networks
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•
Why are cash transfers for the elderly important?
•
Global evidence from elderly cash transfers
•
A description of ASLURETI beneficiaries
•
Impacts of ASLURETI
Elderly cash transfers improve the future labor
force: reduced stunting
Children who are stunted are likely to earn 26 per cent less as adults if they had
reached their full development potential South Africa: households with Old Age Grant recipients resulted in a 5 cm increase in height-for-age of children
Uganda: the old age grant has contributed to an increase in the weight-for-height of children of 0.86 s.d.
Percentage of children under age 5 with stunted growth, by province in Indonesia
Elderly cash transfers contribute to the future labour
force: improved education
• South Africa: households that received an Old Age Grant had a 25% reduction in the share of children not enrolled in school Source: Samon et al. (2004)
• Uganda: The SAGE program
contributed to a 14% increase in the proportion of children attending primary and secondary school Source: Kidd et al. (2016)
• Bolivia: school enrolment is 8 percentage points higher in old age transfer households Source: Mendizabal and Escobar (2013)
• China: the Old Age Transfers have reduced delayed education among younger girls and dropout rates among older girls Source: Huang and Zhang (2016)
56% of youth in Indonesia complete senior secondary education
Source: Indonesia Ministry of National Development Planning and the United Nations Children’s Fund
(2017)
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Elderly cash transfers
help people invest in
small businesses and
generate income
• The Senior Citizen’s Grant in Uganda has contributed to
a 77% increase in beneficiaries purchasing livestock and a 42% increase in the value of livestock purchased
• In a study in Swaziland, 19% of old age transfer
recipients stated they were able to grow more crops as they could buy afford more seeds, fertilisers, hire of tractors, purchase manure and buy petrol for water pumps (RHVP et al., 2010).
• Food consumption among rural beneficiaries of the elderly cash transfer in Bolivia rose by almost 165% of the transfer value due to investments in agricultural inputs and livestock (HLPE, 2012 as cited in Holmes & Bhuvanendra, 2013)
…And have been proven to reduce
poverty
In Georgia, 69% of the
reduction in child poverty
is the result of its
universal old age cash
transfer
Relationship between reductions in poverty in OECD countries after social transfers with cash transfer expenditure
Italy
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00%
R
Elderly cash transfers are critical to
Developed countries’ social expenditure and inequality R2= 0.38
Situation in Indonesia:
Levels of income inequality are high in Indonesia, with a Gini coefficient of 0.408, measured in 2015
Source: Indonesia Ministry of National Development Planning and the United
Nations Children’s Fund (2017)
Global evidence:
EU countries: elderly transfers are responsible for about half of the decrease in inequality.
Brazil: elderly transfers have
contributed to reduced inequality by an estimated 12%
Georgia: social transfers have reduced the Gini coefficient from 0.41 to 0.36,
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Percentage of GDP
If
IDR for eve
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Why are cash transfers for the elderly important?
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Global evidence from elderly cash transfers
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ASLURETI: description of beneficiaries
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Indonesia’s example: ASLURETI (Impacts of ASLURETI)
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• Started in 2015 and provides ALL beneficiaries over the age of 70 with a regular cash transfer in Aceh Jaya (2,709 beneficiaries)
• “All the elderly in Aceh Jaya are vulnerable and often neglected, even if they live in better off households. We have a responsibility to ensure the dignity and well-being of every elderly person, not just those from the poorest households.”
• 200,000 IDR a month – budget envelope of 6.5 M
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Most are widows, and don’t have support from
spouses
Male Female Total
Perc
Married Divorced Widowed
• 17% of beneficiaries are disabled (22% of women; 12% of men)
• 90% claim that the transfers from other households/family is inadequate;
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Most are uneducated and illiterate (women
more than men)…
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Percentage of Respondents
No School Not Completed Elementary School Completed Elementary School Completed Junior High School Completed Senior High School Attended University
• 77% of beneficiaries have no schooling, or just some elementary schooling (87% are women).
• As a result, 74% of female beneficiaries are illiterate (as compared to 37% of men)
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As a result, economic opportunities for the
elderly are limited…
66%
Male Female Total
Monthly Income <IDR 1 Million Monthly Income IDR>1 Million
• 40% of beneficiaries must work to support themselves, despite frail health and limited opportunities
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Most are in need of social protection, but have
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…And most felt that ASLURETI was the SP
scheme that benefited them the most…
54%
21% 13%
9%
1%1%1%
ASLURETI JKN/BPJS Free Electricity Rastra Scholarship (BOS) Home Renovation Other • 54% of beneficiaries valued ASLURETI the most
• 21% benefited most from JKN
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Why are cash transfers for the elderly important?
•
A description of ASLURETI beneficiaries
•
Impacts of ASLURETI
•
Global evidence from elderly cash transfers
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A small transfer of 200,000 IDR makes a big
impact…
2%Social / Religious / Fun / Other Pay debt Transportation
Productive enterprise and savings Buy Meat Pay school fees/pocket money for grandchildren Health expenses Buy food/goods for themselves Buy food/goods for the family
• Nearly 50% of the transfers are spent on food/goods for themselves and their families (meat; soap; clothes; rice)
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• 75% of beneficiaries have better access to healthcare
• 20% of the ASLURETI income goes to pay for transport to health centres; and to purchasing medicine and doctors visits not covered by JKN
“Our health is everything. If we are healthy, we can do anything…Before
[ASLURETI], I used to feel guilty asking my children to take me to the doctor…but now, I give them some money for motorbike fuel, and I contribute some money for my medicines…Now I don’t feel guilty, and I go to the doctor when I need…”
• 70% experienced improvements in their emotional health due to improved relations with their family, greater sense of independence, and being able to contribute to their community
ASLURETI has improved healthcare access
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• 81% claim that they are happier because they can contribute to theirs, and their
family’s needs
• Most of the elderly claimed to have strained relationships with their children/in-laws because they are seen as an economic burden. ASLURETI is changing this:
“Before, I used to always ask my daughter-in-law for money. I hated asking her. But now, she is happy because I can occasionally buy meat for the family . Sometimes, she borrows money from me for her small shop…without me, she could not run her business.”
• As a result, 91% of beneficiaries feel greater dignity and autonomy
ASLURETI has improved household
Especially those with their grandkids…
• Purchasing gifts for relatives –esp. grandchildren - strengthens important social bonds
• Nationally, the elderly have always been important contributors for younger generations, but this has been declining (TNP2K, 2014)
• ASLURETI beneficiaries spend 12% of their income for their grandchildren through:
• School Fees
• Pocket money
• Lending money for employment seeking or transport costs
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• 85% of respondents agreed that the ASLURETI program improved their status and engagement within their communities.
• They are increasingly able to donate to charities (e.g. mosques, orphanages, etc.), financially contribute to ceremonies (and thus more readily attend social events), and provide financial support to a neighbour when in need
“We see that the elderly around here attend more events, and give more to the mosques and orphanages. Last night I saw an elderly couple at a wedding, and normally they would decline, as they’d be unable to contribute. Sometimes they can only gift IDR 30,000, but the point is that they are more active now, and we all notice this.”
ASLURETI is stimulating the local
economy….
• Beneficiaries visit warungs more often. They purchase coffee, sugar, eggs, milk and rice – BY THEMSELVES.
• They can repay their debt – so shopkeepers sell to them on credit since ASLURETI
• Beneficiaries putting money away for their own funeral costs, and future emergencies
And, it improves the lives of caregivers…
• 80% of caregivers feel that their lives have improved since
receiving ASLURETI
• 60%) feel that they now have more time for themselves;
• 58% claim that they can focus more of their resources on their children;
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If you forget everything else…
Indonesia is an aging society. There are currently 22 million elderly people. By 2050, more than 20% of the population will be over the age of
65.
Cash transfers for the elderly WILL reduce poverty and inequality, and IT IS AFFORDABLE
They would not just benefit the elderly. They would benefit EVERYONE. Indonesia is the only country left in Asia that relies fully on contributory
