Heterogeneous Effect of a Non-contributory Pension. Evidence from Bolivia

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We test whether eligibility for the Renta Dignidad social pen- sion mitigates old-age poverty and induces (in)direct behavioural responses by using a regression discontinuity design as the age cut- off determining eligibility is set at 60. We find that, first, neither poverty nor consumption or labour supply are affected by spouses’ eligibility and, second, the probability of co-residing grandchildren in households with both spouses eligible is higher. We contribute to the literature by showing how the role of gender in decisions with an intergenerational component can help rationalising apparent limita- tions of the pension in fighting poverty in the short-run.
We thank for helpful comments Pedro Albarran, Marianna Battaglia, Matteo Bobba, Fernanda Brollo, Lola Collado, Decio Coviello, Giacomo De Giorgi, Giacomo De Luca, Ada Ferrer-i-Carbonell, Maitreesh Ghatak, Tommaso Nannicini, Steven Poelhekke, Anna Sanz, Alessandro Tarozzi, Lore Van- dewalle and participants in: seminars at U. Alicante and at the Tinbergen Institute in Amsterdam, 2013 EUI Alumni Conference, 2013 Econometric Society Meeting in Gothenburg, IZA Workshop on Labor Markets and Labor Market Policies for Older Workers and 2014 Petralia Sottana Applied Economics Workshop. Financial support from the Spanish Ministerio de Econom´ıa y Competitividad (ECO2013- 43119, ECO2015-65820-P and ECO2016-77200-P) and from the Universidad de Alicante (GRE 13-04) is gratefully acknowledged. All remaining errors are our own.
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