Work, Retirement or Transfers: Association between Income Sources and Self-Rated Economic Situation among Latin American Elderly

Gilbert Brenes-Camacho, Universidad de Costa Rica

Self-rated economic situation has been studied rarely in developing countries. Social Security systems have been useful in protecting elderly against deleterious financial changes at the end of life, but in several developing countries, Social Security coverage is rather low. We compare two countries with different degrees of coverage in retirement pension and health insurance benefits: Costa Rica (relatively high) and Mexico (lower coverage). We argue that labor and informal family transfers would be more relevant for rating one’s own economic situation in contexts of low Social Security coverage (Mexico) than in relatively high coverage (Costa Rica). We use data from the first waves of two studies about aging: CRELES (2004-2006), and MHAS (2001-2002). We do find evidence for this hypothesis, although labor income has a significant effect among Costa Rican women and among Mexican men, only. The effect of transfers is significant only among Mexicans in determining self-rated economic situation.