Poverty transitions among older households in Brazil and South Africa

The knowledge gap relating to the dynamics of wellbeing and poverty among older households
in developing countries has direct implications for policy. In general, South Africa and Brazil lack official poverty lines. The main objective of this paper is to provide estimates of poverty dynamics among a sample of older people and their households in Brazil and South Africa, and contribute to fill in this huge knowledge gap.

The paper provides estimates of changes in poverty among older people in Brazil and South Africa between 2002 and 2008, examining poverty status transitions of older people and their households over time.

Main findings are listed below: 

• between 2002 and 2008, estimates of poverty incidence and depth among older households show a strong declining trend in the Brazil panel, but the picture is more complex in the South Africa panel
• when using expenditure indicators of welfare, estimate of poverty incidence and depth show a declining trend, but when income indicators of welfare are employed, the trend is reversed
• the country-level estimates of poverty incidence and gap for Brazil and South Africa show a declining trend in the former and a stagnant trend in the latter 
• poverty trends net out significant transitions in poverty status among older households (40% of them in South Africa and 20%- 33% in Brazil experienced a transition)
  

Key policy implications that emerged from the findings are:

• there is large contribution of non-contributory pensions to poverty reduction among older households in the two countries
• yet the impact on persistent poverty is significantly greater; the share of households exiting poverty is almost unaffected
• for a significant group of older households, old age income support is insufficient to prevent them from staying in poverty, or falling further behind
• it could be suggested that short-term ‘shocks’ are probably less important than longer-term, and perhaps cumulative, deficits in households’ productive capacity contribute in helping generate adverse welfare dynamics
• the key conclusion relates to the need to pay attention to the dynamics of welfare among older/pensioner households