Public pensions, economic development, and the labor force participation of older adults in Latin America in 1990–2010

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Abstract

This paper investigates the coverage of public pension programs in Latin America and discusses the relation between economic development, the existence of public pension programs, and elderly labor force participation. The paper presents stylized facts about the labor force by age and the connection between economic development and labor supply using aggregated data from 23 Latin American countries. The second part of the paper uses regression models to investigate the effects of economic development and social security system on the labor force participation of the older adults in 23 Latin American countries over the period 1990–2010. The results show that in lower income Latin American countries, most men remained in the labor force until age 65 or beyond and that with economic development and related changes, the labor force participation of older men, even those aged 55–59, starts to decline. Overall, the paper provides some insight on the evolution of labor supply patterns in less developed economies with rising income, changes in population age structure, shifts in occupational composition, and development in public pension programs.

Keywords

labor force participation

economic development

older adults

elderly

public pensions

social security

retirement

Latin America

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