Social Security and Living Arrangements of the Elderly in Developing Countries

Yumiko Kamiya, University of California, Berkeley

In the early 1990's, reforms of the social security systems in Brazil and South Africa dramatically expanded pension coverage. As a consequence, elderly both in urban and rural areas experienced substantive increases in their non-labor incomes. This paper, based on data from Brazilian National Household Survey (PNAD) and Population Housing Census of South Africa, examines the determinants of the living arrangements of the elderly in both countries, and particularly the effects of changes in income due to Pension Reform on those arrangements. For this purpose, we first examine descriptive statistics regarding household composition, mean number of living children, headship rate, and the proportion of the elderly in co-residence and living independently, to examine if the change in the living arrangements are due to compositional effect. We then apply a logit model to disentangle the roles of demographic and economic factors to determine which factor or combination of factors can account for the observed changes in living arrangements of the elderly.