Lifecourse, ageing and the labour market in developing countries.

1. Lifecourse, ageing and the labour market in developing countries. Labour market opportunities for older people in Argentina. Nice work if you can get it? Armando Barrientos Institute of Development Studies, University of Sussex and Chronic Poverty Research Centre a.barrientos@ids.ac.uk

2. Why the focus on labour markets? • Rapid demographic transition in developing countries • By 2050 there will be 9.2 Africans, 8.2 Latin Americans, and 55 Asians over the age of 60 for every 10 Europeans of the same age group • Old age income support is scarce in some developing regions, e.g. Africa, and declining in other regions, e.g. Latin America • Labour earnings the main source of household income, • ….. but little research on labour market opportunities for older people in developing countries

4. Why Argentina? • Advanced demographic transition • 13.5% of the population over the age of 60 • Rapid decline in social protection coverage of those in work, due to financial crises, structural adjustment, and social insurance reforms • In 1980 around 70% of the labour force were covered by social insurance; by 2003 it declined to 35% • And progressive reduction in pension coverage, and old age support • In 1993 12.5% of those aged 65 and over did not have a pension, by 2003 this had risen to 23% • In 1993 7.4% of those aged 65 and over did not have any source of income, by 2003 this had risen to 16%

5. ETEEP data (Encuesta a la Tercera Edad sobre Estrategias Previsionales) • 2004 Survey targeted 3014 households with people aged 60 or over in urban areas of Argentina, but excluding the Patagonia Region • Covering • household characteristics, income, assets, expenditure, livelihood strategies, • …and employment and pension histories

8. A basic model of an individual’s decision to continue participating in the labour market • Decision is based on a comparison of the value that the labour market places on the time of the individual worker, say a wage w, and her implicit valuation of her time, say a ‘reservation wage’ w* if w > w* then stay in employment if w ≤ w* then withdraw • Main determinants: • Non-labour income (mainly pension income) • Health status • Household arrangements • Occupation

9. Comparison across three groups: active, inactive pensioners, inactive non-pensioners • Household characteristics: • Active group more likely to be male, younger, and have more children in the household. They also have fewer pensioners in household • Livelihoods: • Inactive non-pensioners are significantly poorer; have lower number of consumer durables • Inactive pensioners report lower number of coping strategies used • Health: • Active respondents have better health status, and many inactive non-pensioners report not being able to afford needed health care

10. Comparison across groups continued…. • Occupation and employment: comparison of current job of active group with last job of inactive group • Higher share of active respondents in construction, transport, utilities and services • Share of self-employment among active group is twice as high as in the inactive groups • Active respondents have long spells in current employment, long term engagement in the labour market, and higher density of employment during their working lives • Active respondents have lower density of social insurance contributions

11. The labour market and older people: friend or foe? Predicting potential earnings • Two stage estimation, OLS regression of individual, household, and employment history variables on monthly earnings, but corrected for participation propensities (probit model of participation) • Then use the results of the regression to predict monthly earnings for participants and non-participants

14. Conclusions • Labour market opportunities for older people in Argentina are skewed towards those: • with higher potential earnings • with long engagement in the labour market • male, younger, healthier • self-employed and work in services occupations • Is labour market participation an effective alternative source of livelihood for older people and their households in Argentina? • Unlikely for unskilled workers with irregular labour market engagement • Enhancing labour market opportunities for older people require policies to improve health status and continued employment well before retirement (life course) • Strengthening social assistance remains an urgent policy challenge for this group in Argentina

15. Papers and report • The World Bank [2005] Argentina. Ageing and Social Security, a Crisis not yet averted, Report 34154-AR, Social Protection Unit, Human Development Department, Latin America and Caribbean Regional Office