Social Spending and Income Redistribution in Argentina During the 2000s: The Rising Role of Noncontributory Pensions

Serie Documentos de Trabajo, Universidad del CEMA, Doc. No. 499

32 Pages Posted: 13 Mar 2013

See all articles by Nora Lustig

Nora Lustig

Tulane University

Carola Pessino

University of CEMA - Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 1, 2012

Abstract

Between 2003 and 2009, Argentina’s social spending as a share of GDP increased by 7.6 percentage points. Marginal benefit incidence analysis for 2003, 2006, and 2009 suggests that the contribution of cash transfers to the reduction of disposable income inequality and poverty rose markedly between 2006 and 2009 primarily due to the launching of a noncontributory pension program – the pension moratorium – in 2004. Noncontributory pensions as a share of GDP rose by 2.2 percentage points between 2003 and 2009 and entailed a redistribution of income to the poor, and from the formal sector pensioners with above minimum pensions to the beneficiaries of the pension moratorium. The redistributive impact of the expansion of public spending on education and health was also sizeable and equalizing, but to a lesser degree. An assessment of fiscal funding sources puts the sustainability of the redistributive policies into question, unless nonsocial spending is significantly cut.

Keywords: social spending, benefit incidence, inequality, poverty, Argentina

JEL Classification: D31, H22, I38

Suggested Citation

Lustig, Nora Claudia and Pessino, Carola, Social Spending and Income Redistribution in Argentina During the 2000s: The Rising Role of Noncontributory Pensions (November 1, 2012). Serie Documentos de Trabajo, Universidad del CEMA, Doc. No. 499 , Available at SSRN: https://ssrn.com/abstract=2232877 or http://dx.doi.org/10.2139/ssrn.2232877

Nora Claudia Lustig

Tulane University ( email )

6823 St Charles Ave
New Orleans, LA 70118
United States

Carola Pessino (Contact Author)

University of CEMA - Economics ( email )

Buenos Aires
Argentina

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