Ageing in the Twenty-First Century: - HelpAge International

Income security in old age
The challenges that population ageing creates for
economies are being widely debated by policymakers.
There are concerns that population ageing will
negatively affect economic output, or even lead to
deflation, and questions about how countries will be
able to afford social security as their populations grow
older. Most countries have experienced economic
growth (apart from during the recent global financial
and economic crisis) and are richer today than they
were years ago. However, despite the growth of the
global economy, a large proportion of the world’s
population still lives in poverty.
This section addresses poverty and social exclusion in
older age and discusses two mechanisms to reduce or
eradicate poverty, namely social transfers and full and
productive employment.
Poverty and social exclusion
“Where poverty is endemic, persons who survive a
lifetime of poverty often face an old age of deepening
poverty.” (Madrid Plan, para. 45)
Poverty is one of the main threats to the well-being of
the older population. It is linked to low income, lack
of pension benefits, low literacy, poor health and
malnutrition. Access to health care, good nutrition,
basic services and adequate shelter is limited for many
of the world’s older poor. Many older persons have
no regular income. Old age brings with it a reduced
capacity for work, which increases the likelihood of
older people becoming and remaining poor.
Poverty in old age has a strong gender dimension.
Women’s life expectancy is higher than that of men,
so that they may spend more time living in poverty
than men. They are more likely to lose their partner,
and less likely to remarry. Lower education levels and
the need to combine work with childcare means that
women are more likely to work in the informal sector.
They are often paid less than men. Older women,
especially widows and those without children, are
particularly vulnerable, both economically and
socially. In 2007, WHO found, for example, that
particular groups of older women were more at risk
of poverty in all countries, including those who are
widowed, divorced or with disabilities, and those
caring for grandchildren and children orphaned by
AIDS. 28
Eradication of poverty among older persons is one
of the fundamental aims of the Madrid Plan. In spite
of significant development gains in the last decade,
20 per cent of the world’s population lived below the
international poverty line of US$1.25 a day in 2005. 29
A key question in relation to ageing is to understand
where older people fit within the context of
pervasive poverty.
On average, existing studies suggest that older
people, and people living in households with an
older person, face higher levels of poverty. In OECD
countries, the old-age poverty rate is slightly higher
than the average for the whole population, at 13.3
per cent, compared with 10.6 per cent. 30 A review of
existing survey evidence from sub-Saharan Africa
and Latin America suggests that in most countries
older people are over-represented among the poor
in the majority of countries surveyed. 31
Yet, despite these trends, the situation varies
significantly from country to country. In OECD
countries, older people are relatively poorer in 19
countries, but relatively better off in 11. Similarly,
household data from 15 countries in sub-Saharan
Africa show that the incidence of poverty in households
with an older person is higher than the average
population in 11 of these countries, but the difference
is statistically significant in only nine of them. 32
Recent data from Latin America shows that the
incidence of poverty is about 30 per cent in nine
countries with good data. In El Salvador, the
Dominican Republic, Guatemala, Honduras and
Paraguay, more than 40 per cent of the population
aged 60 and over is poor. Almost one third of this
group can be considered as indigent. 33
The latest evidence of how European countries
differ in terms of poverty risks for older persons
(aged 65 and over) shows that, on average, older
people have a higher poverty rate than the total
population. 34 The highest poverty rates for older
people were observed in Latvia (51 per cent), Cyprus
(49 per cent), Estonia (39 per cent) and Bulgaria
(34 per cent) and the lowest in Hungary (4 per cent),
Luxemburg (5 per cent) and the Czech Republic
(7 per cent). 35 In general, countries with low poverty
risk rates for older persons have a good social
safety net in the form of a basic pension and/or
they offer strong redistribution in earnings-related
contributory pension schemes. 36
41