Understanding Poverty among the Elderly in India: Implications for Social Pension Policy

Understanding Poverty among the Elderly in India: Implications for Social Pension Policy The Government of India is implementing a new policy which dramatically increases funding for a cash transfer program targeted to the poor elderly. The expansion of this ‘social pension’ in terms of coverage and benefit levels is taking place with little understanding of poverty among India’s elderly or its determinants. This paper finds that households with elderly members do not have higher poverty rates than non-elderly households. This result is robust under various measures that take into account the size and composition of households. Separate evidence suggests that part of the explanation for this phenomenon is that the poor have higher mortality rates and are therefore underrepresented. This explanation has important implications for social pension policy and suggests that programs that reduce elderly mortality may actually increase the relative poverty levels of the elderly. JEL Classification: J14, I31