This document summarizes Giulio Bordon's thesis defense on assessing the impact of a universal social pension in Uganda through microsimulation. The thesis examines Uganda's current pension system and social protections for the elderly, analyzes consumption, poverty and inequality levels, and models the impact of a universal pension on these factors. Through static microsimulation using national survey data, it finds that a universal pension would significantly improve food security and school attendance among beneficiary households. However, the current benefit level may not adequately prevent poverty, and future indexing is needed to ensure adequacy over time. The thesis concludes by recommending expanding social protection and addressing informality to improve livelihoods.

1. Impact Assessment by Microsimulation
of a Non-Contributory Universal Social Pension in Uganda
Thesis Defense
Giulio Bordon
Master in Public Policy and Human Development
Specialization in Social Protection
25th October 2019

2. Pensions are a major priority
2
0
2
4
6
8
10
12
14
16
18
20
%ofGDP
Unemployment
Family
Incapacity related
Survivors
Old age
China, N of
new
pensioners
since 2009
= 130 M
Brazil,
Reductions in
inequality
after public
transfers
Public expenditure on pensions in OECD countries
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3. Literature Review
The rationale of old-age social security
– Human Rights (UN, 1948)
– SDGs (UN, 2015)
– Objectives: economic security, social inclusion, poverty prevention, redistribution (ILO, 1952, 2012; World
Bank, 2008; OECD, 2018; Holzmann et al., 2005, 2009; Barr & Diamond, 2009)
• Convention 102 , Recommendation 202
• ILO: 8 Principles
– National governments have the duty to expand coverage, provide adequacy and supervise
affordability of social protection schemes
– Structure: Pillars & Entitlement conditions (WB, 1994; Holzmann & Hinz,2005; ILO, 2012, 2018)
Challenges (ISSA, 2017; ILO, 2017; Donahue, 2019)
– Coverage
– Adequacy
– Financial sustainability
– Political feasibility
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4. Literature Review
Non-Contributory Policies: Universality and targeting
• Political Economy (Schüring & Gassmann, 2012)
– Assumptions
– Voters’ behaviour
– Cost-effectiveness & accountability
– Effectiveness
• Inclusivity (Jordan, 2013)
– Support  Patterns  Lock-in
• Extending Coverage (UN, 1948; Holzmann et al., 2009; ILO, 2012)
– Human Rights
– Patterns of development
– Principle of non discrimination, respect for rights and dignity & social inclusion
• Stigma (Graham, 2002; Walker, 2014)
• Social Sustainability (Grech, 2013)
• Errors (Coady et al. 2004; Kidd, 2013)
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5. Case Selection
Uganda Context Landlocked East African nation, 700$ GDP per capita,
avg. Real GDP growth 6%, 21.4% below national poverty line.
Population N 35 M, 5.40 TFR, EDR 5.80%, N 2.31% is 65+ in 2014
N 100 M, 3.50 TFR, EDR 5.90%, N 3.57% is 65+ in 2050
Labour Force LFPR WAP Male 70.71%, Female 64.04% | 65+ 65% & 47%
EMP 35% LU2 – Time Related Unemployment
Formality 10% of EMP
Pillars Floor: Pilot SCG, N 19.87%, 25,000 UGX ~30% of NPL
1st Pillar: NSSF. Provident, 3.4% WAP & PSPS+AFPS+PPS | Caveats
2nd & 3rd Pillars: Voluntary plans, ~13% of formal workers
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6. Research Question
What would be the
impacts on poverty and
consumption of the
elderly of a universal
pension scheme in
Uganda?
SQ1
•What is the present population’s
structure, and how is the
Ugandan labour market
structured?
•What are the future trends of
the population’s and labour
market’s structures in Uganda?
SQ2
•What is the current state of
social protection for elderly
citizens in Uganda?
SQ3
•What is the current
consumption, poverty, and
inequality profile of Uganda,
with distinguished attention to
the elderly population?
SQ4
•To what extent the transfers
reach the population living in
poverty?
SQ5
•Is the current benefit adequate
to prevent monetary poverty
among the elderly?
•With what measures is possible
to ensure the adequacy of the
benefits in the future?
SQ6
•What is the impact of the
benefit on consumption,
poverty, and inequality, with
distinguished attention to the
elderly population?
SQ7
•What is the effect of the SCG on
beneficiary households’
consumption, with attention to food
consumption, and education and
health expenditure?
•What is the effect of the SCG in
beneficiary households’ indicator
for food security and school
attendance?
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7. Methodology
Household survey
UNPS 2015-16,
LSMS
Poverty Analysis
FGT &
Disaggregation
Static
Microsimulation
Transfer to
Disposable Income
4 Variants
Incidence and
Impact assessment
Modelling causal
effects on
consumption’s
category
FOOD & SCHOOL
Estimation effects
Test of significance
Results
&
Analysis
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8. Results
8
Food security | Caveats
School attendance
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9. Discussion
9
*
**
** 2019
** 2015
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10. Conclusion
Recommendation 1: Address Informality & Increase Labour Productivity
Job creation, ALMP, labour productivity for informal sector
Recommendation 2: Expand Social Protection
Costing, diversification of SP, population structure
Recommendation 3: Universality is close and can be achieved
Path Dependency, Roll-Out, Adequacy
Recommendation 4: Adjust the Benefit (Today)
Adequacy, greater improvement in consumption share and indicators of FOOD & SCHOOl
Recommendation 5: Adjust the Benefit (Over Time)
Indexation, lack of legal mechanism, political will
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11. References (1/2)
• Barr, N. A., & Diamond, P. A. (2009). Reforming pensions. In CESifo working papers ; No. 2523 : Category 1, Public
finance TA - TT -. Retrieved from http://www.cesifo-group.de/DocDL/cesifo1_wp2523.pdf
• Coady, D., Grosh, M., & Hoddinott, J. (2004). Targeting of transfers in developing countries: Review of lessons and
experience. The World Bank.
• Donahue, J. D. (2017). Strategic Alignment for Policy Analysis and Design - HKS Case Program. HKS, (2090.0), 4.
Retrieved from https://case.hks.harvard.edu/strategic-alignment-for-policy-analysis-and-design/
• Grech, A. G. (2013). Assessing the sustainability of pension reforms in Europe. Journal of International and
Comparative Social Policy, 29(2), 143–162. https://doi.org/10.1080/21699763.2013.836980
• Heins, G. (2019). Social Protection and Old-Age: A cost Evaluation of Universal Pension Provision in Uganda. United
Nations University, Maastricht: Submitted Thesis to the Programme: Msc in Pubic Policy and Human Development,
UNU-MERIT - Forthcoming.
• Holzmann, R., & Hinz, R. (2005). Old Age Income Support in the 21st century: An International Perspective on
Pension Systems and Reform. Retrieved from https://econpapers.repec.org/RePEc:wbk:wbpubs:7336
• Holzmann, R., Robalino, D. A., & Takayama, N. (2009). Closing the Coverage Gap : The Role of Social Pensions and
Other Retirement Income Transfers. World Bank Publications. Retrieved from
https://ideas.repec.org/b/wbk/wbpubs/2651.html#author-abstract
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12. References (2/2)
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• ILO. (2012). Recommendation R202 - Social Protection Floors Recommendation, 2012 (No. 202). Retrieved from
https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO:12100:P12100_INSTRUMENT_ID:3065524:NO
• ILO. (1952). Convention C102 - Social Security (Minimum Standards) Convention, 1952 (No. 102).
• ILO. (2017). World Social Protection Report 2017-19: universal social protection to achieve the Sustainable
Development Goals. International Labour Organization.
• ISSA. (2017). Ten Global Challenges for Social Security - Africa. Retrieved from
https://www.issa.int/en_GB/details?p_p_id=DetailDocumentPortlet_WAR_ISSA_Event_Documentsportlet_INSTANCE_
JPFQhjRPI0Fk&p_p_lifecycle=2&p_p_state=normal&p_p_mode=view&p_p_cacheability=cacheLevelPage&p_p_col_id=
column-1&p_p_col_count=2&_DetailDocumentPortlet
• Kidd, S. (2013). Rethinking “Targeting” in international development. Pathways’ Perspectives, Issue, (11).
• The World Bank. (1994). Averting the old age crisis: policies to protect the old and promote growth. Washington DC:
The World Bank.
• The World Bank. (2008). The World Bank Pension Conceptual Framework. Retrieved from
https://openknowledge.worldbank.org/handle/10986/11139
• United Nations. (1948). Universal Declaration of Human Rights. UN General Assembly.
• Walker, R. (2014). The shame of poverty. Oxford: Oxford University Press.