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vufo July 16th, 2009 12:23 AM

Aging, Poverty, and the Role of a Social Pension in Vietnam
 
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Giang Thanh Long

Research Fellow, Vietnam Development Forum (VDF)-Tokyo
National Graduate Institute for Policy Studies
7-22-1 Roppongi, Minato-ku, Tokyo 106 8677
Email: gtlong_grips@yahoo.com

Wade Donald Pfau
Associate Professor of Economics
National Graduate Institute for Policy Studies
7-22-1 Roppongi, Minato-ku, Tokyo 106 8677
Email: wpfau@grips.ac.jp
Abstract
By using the Vietnam Household Living Standard Survey in 2004, this paper seeks to quantify the potential role and impacts of a social pension scheme for reducing elderly poverty in Vietnam. We simulate how the poverty rate, poverty gap, and poverty severity of the elderly would have been changed in the counterfactual situation that such a scheme had been introduced to Vietnam in the past. We consider a number of categorical targeting groups ofelderly people along with various transfer parameters to assess the impacts of the scheme on social welfare. We find that, depending on the characteristics of the social pension, there would be beneficial poverty reductions, but also large leakages to the non-poor people. For a variety of measures, our results suggest that targeting the elderly in rural areas might be the most effective use of limited resources. Also, simulations for different budgetary constraints show that, even with limited budgeting, a social pension scheme would significantly reduce poverty incidence for the elderly. For example, the elderly poverty gap could be reduced by almost 60 percent with a program that costs one percent of GDP.


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