Transfers to older people in developing countries can reduce poverty and support economic growth. As populations age in developing nations, social pensions that provide monthly cash transfers to elderly citizens can help support households and communities. Evidence from countries implementing social pension programs like Lesotho, Bolivia, and Bangladesh show they reduce poverty among older people and their families, encourage local production and trade, and only require about 1% of GDP to finance. Well-designed social pensions have potential to both aid vulnerable elderly populations and contribute to economic development in poor communities.
5. Direct public transfers as a proportion of GDP 1971-1997
0 2 4 6 8 10 12 14 16
Sub-Saharan Africa
South Asia
Latin America and
the Caribbean
North America
Western Europe
% of GDP
Transfers to organisations and households
8. • Lesotho is one of the poorest countries in
Southern Africa
• In 2004 a social pension was introduced, it pays
US$ 24 transfer a month to all aged 70 and over
• Because older people in developing countries
live with their extended family, the social
pension is in fact a household transfer paid
through the older person’
13. Bolivian pensioner
receiving his
BONOSOL
Tom Weller/HAI/2006
In rural areas of
Bolivia, many farmers
have land but no cash
to buy seeds and tools
A study showed the
rise in consumption
among pensioner
households was twice
the amount transferred
15. Mr. Motu is one of
the beneficiaries
He and his wife
live here
He saved 3
months of
transfers to pay for
an operation to
remove his wife’s
cataracts
A 12 year old
grandchild lives here
…who now attends
school and helps
with the family plot
Armando Barrientos/2005
16. The capacity of public agencies is very limited, so a village committee
manages the transfer scheme
Armando Barrientos/2005