Intended and unintended effects of unconditional cash transfers to the elderly: The case of Renta Dignidad

This paper, “Intended and Unintended Effects of Unconditional Cash Transfers to the Elderly: The Case of Renta Dignidad” presents a quasi-experimental impact assessment of the intended and unintended effects of Renta Dignidad, a non-refundable universal pension. contribution of old age in Bolivia, on variables of well-being, savings, and household investment and results of the labor market of direct and indirect beneficiaries. An exogenous policy change that lowers the beneficiary age from 65 to 60 years was used to identify the causal effects of the program. The identification strategy is based on Differences-in-Differences and Changes-in-Change models to calculate not only the average effect but also specific quantiles. We find that the non-contributory pension has complex intended and unintended effects on different individual and household outcomes for different types of individuals and households. In the case of women, we find that the program has increased the average non-labor income of their households, which has reduced their labor supply and labor income, which in turn has decreased the labor income of their households. In the case of men, the transfer has significantly increased their household non-labor income, but the increase in per capita household income is not significant.