Page 127 - IJPS-3-1

International Journal of Population Studies

RESEARCH ARTICLE
P ublic pe nsions, e c onomic

development, and the labor force

participation of older adults in Latin

America in 1990–2010

Bernardo Lanza Queiroz
Department of Demography – Universidade Federal de Minas Gerais, Belo Horizonte,
Brazil

Abstract: This paper investigates the coverage of public pension programs in Latin
America and discusses the relation between economic development, the existence of
public pension programs, and elderly labor force participation. The paper presents
stylized facts about the labor force by age and the connection between economic
development and labor supply using aggregated data from 23 Latin American
countries. The second part of the paper uses regression models to investigate the effects
of economic development and social security system on the labor force participation of
the older adults in 23 Latin American countries over the period 1990–2010. The results
show that in lower income Latin American countries, most men remained in the labor
force until age 65 or beyond and that with economic development and related changes,
the labor force participation of older men, even those aged 55–59, starts to decline.
Overall, the paper provides some insight on the evolution of labor supply patterns in
ARTICLE INFO less developed economies with rising income, changes in population age structure,
Received: February 17, 2017 shifts in occupational composition, and development in public pension programs.
Accepted: March 29, 2017
Published Online: April 6, 2017 Keywords: labor force participation; economic development; older adults; elderly;

public pensions; social security; retirement; Latin America
*Correspondence Author
Bernardo Lanza Queiroz, Depart­
ment of Demography, CEDE­
PLAR, Universidade Federal de 1 Introduction
Minas Gerais, Belo Hori zonte,
MG, 31270­901 Brazil Demographic changes, especially population aging might have important impacts
lanza@cedeplar.ufmg.br
on macroeconomic variables, public sector fiscal balance, and other areas such as
Citation public pension and public health systems (Mason, Lee, and Lee, 2010). The literature
Queiroz BL (2017). Public on this topic in developed countries is extensive (Costa, 1998; Burtless and Quinn,
pensions, economic deve­
lopment, and the labor force 2001; Gruber and Wise, 1999; 2004; 2010), and researchers know a great deal about
participation of older adults labor force behavior in different countries in the developed world. In recent decades,
in Latin America in 1990­
2010. International Journal of population aging combined with early retirement has put social security systems across
Population Studies, 3(1):
121–137. the industrialized world under pressure (Bongaarts, 2004; Bloom and McKinnon,
doi: 10.18063/IJPS.2017.01.008. 2010). Thus, legislation changes have taken center stage in public policy debates
in recent years (Wise, 2004; Bloom and McKinnon, 2010). Today, retirement is an
Copyright: © 2017 Bernardo
Lanza Queiroz. This is an Open important stage on one’s life cycle, but it is important to maintain the sustainability
Access article distributed under
the terms of the Creative Com ­ of the public pension systems (Costa, 1998; Mason, Lee, and Lee, 2010). Contrary to
mons Attribution­Non Commercial the past, most workers in more developed economies today enjoy a long and healthy
4.0 Inter national License (http://
creativecommons.org/licenses/ period of retirement. These changes are a paradox since people are entering the labor
by­nc/4.0/), permit ting all non­ force later because of increasing educational attainment and prolonged longevity, and
commercial use, distribution,
and reproduction in any medium, in the meantime they are leaving the labor force at younger ages (Wise, 1997; 2004;
provided the original work is
properly cited. 2010).
International Journal of Population Studies 2017, Volume 3, Issue 1 121