La protección social en Argentina en un contexto de transición demográfica

Argentine Social Protection in a Context of Demographic Transition 89 Argentine Social Protection in a Context of Demographic Transition Rafael Rofman and Ignacio Apella* World Bank, Práctica Global de Protección Social y Empleo, Buenos Aires Abstract Argentina is going through a process of demographic transition that will result in an older population structure. The demographic transition has direct effects on the quantity and adequacy of social protection transfers, with particular emphasis on those related to pensions. The main objective of this paper is to identify the potential trends of social protection expenditures in an aging context. On the basis of the expenditure profile by age, we apply National Transfer Accounts methodology to simulate social protection expenditures until 2100. The results suggest that, under various alternative social security coverage scenarios, the demographic transition process would lead to an increase in future social protection expenditures, reaching 16% of gross domestic product (GDP) by 2050 and exceeding 24% in 2100. Keywords: Social protection; aging; poverty; pensions; Argentina. * Article received on September 20, 2015; final version approved on March 2, 2016. The authors thank Fabio Bertranou for his comments. This article is based on a chapter in the book Los años no vienen solos: oportunidades y desafios economicos de la transicion demografica en Argentina, edited by the authors and published by the World Bank in 2014. Rafael Rofman has a Master’s in Social Demography from the Universidad Nacional de Luján and a Ph.D. in Demography from the University of California, Berkeley. He is the World Bank Program Leader for Education, Health, Social Protection and Labor, and Poverty, covering Argentina, Paraguay, and Uruguay, and is the author of numerous studies on adult mortality, aging, and social security. Ignacio Apella has a Master’s in Economics from the Universidad de Buenos Aires and is an economist in the World Bank’s Global Practices in Social Protection and Labor in Latin America. He has worked in several countries in the region including Argentina, Bolivia, Chile, El Salvador, Mexico, Peru, and Uruguay. He specializes in systems of social protection, labor economics, health economics, industrial organization and microeconometrics, and is the author of various publications in specialized journals. Emails: ; Vol. XLIII, N° 78, First Semester 2016: pages 89-119 / ISSN 0252-1865 DOI: http://dx.doi.org/10.21678/apuntes.78.836 Copyright 2016: Centro de Investigación de la Universidad del Pacífico 90 Apuntes 78, First Semester 2016 / Rofman and Apella Acronyms AFIP AFJP ANSES AUH CELADE CPI DNPSS EAP EPH GDP INDEC MTEySS SIF SIJP Federal Administration for Public Revenue (Administración Federal de Ingresos Públicos) Retirement and Pension Fund Administrators (Administradoras de fondos de jubilaciones y pensiones) National Social Security Administration (Administración Nacional de Seguridad Social) Universal per Child Allowance (Asignación Universal por Hijo) Latin American and Caribbean Demographic Center (Centro Latinoamericano y Caribeño de Demografía) Consumer price index National Office for Social Security Policies (Dirección Nacional de Políticas de Seguridad Social) Economically active population Permanent Household Survey (Encuesta Permanente de Hogares) Gross domestic product National Institute of Statistics and Censuses (Instituto Nacional de Estadística y Censos) Ministry of Labor, Employment, and Social Security (Ministerio de Trabajo, Empleo y Seguridad Social) Savings, investment, and financing Integral System of Retirement and Pensions (Sistema Integrado de Jubilaciones y Pensiones) Argentine Social Protection in a Context of Demographic Transition 91 1. INTRODUCTION Social security is usually defined as the set of programs and policies, referred to as social insurance, that have as their objective to cover households’ specific risks of income loss. In general terms, social security is established in order to provide certainty and insure individuals against the risk of income loss or spending shocks associated with retirement in old age, disability, sickness, accidents, and death. In turn, social protection encompasses a field that is broader than social security, including not just traditional contributory social security, but also other non-contributory transfer schemes. Thus, social protection programs include contributory social security (old-age and disability pensions; death benefits; occupational hazards; unemployment benefits; family allowances) and non-contributory transfer programs, usually aimed at reducing the incidence of poverty. The funding of non-contributory social protection comes from general revenues, specific taxes, and direct contributions from the state. Social security, on the other hand, tends to cover fewer people and is financed by three types of payroll contributions (from the insured, employers, and the state). Non-contributory programs have traditionally been very limited in their reach, both in terms of budgeting and coverage. Nevertheless, in recent years we have begun to observe a change in trends in social protection systems in the region, with focus on these types of programs progressively increasing. In Argentina, the implementation of the Unemployed Heads of Household Plan, the Social Security Inclusion Program (commonly referred to as the “Moratorium”) and the Universal per Child Allowance (AUH) are clear examples of the expansion of coverage to the population that has been excluded from the formal labor market and is living in a situation of poverty or vulnerability. From a lifecycle perspective, the monetary transfers for social protection reach the population in different ways for each age group. For example, family allowances are transfers to children; unemployed young adults are protected by contributory unemployment insurance as well as training and employment insurance; while older adults receive protection through pension programs. Argentina is undergoing in a demographic transition process towards an older population structure. This is a result of a decrease in fertility and mortality in the last decades. Based on this process, growth is predicted in both the total dependency ratio and the senior 92 Apuntes 78, First Semester 2016 / Rofman and Apella citizen dependency ratio in the coming decades. While the total dependency ratio was 55% in 2010, it is estimated that it will reach 72% by 2100. Furthermore, the proportion of the adult population over age 65 relative to the working-age population was 10% in 2010 and is projected to reach 25% by 2100. The increase in the number and proportion of the population over age 65 in many countries around the world has generated interest in the impact that this trend will have on social security systems. The apparent implication of this phenomenon is pressure on the sustainability of public and private expe (...truncated)