Eclac over 50% in latam does not receive a pension from a contributory system – bnamericas java 8 database

The lack of income from a contributory retirement system in more than half of men, and especially women over 60 in Latin America, is the main factor to remain active in the labor market. This is indicated by the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labor Organization (ILO) in a new joint publication released today.

In issue No. 18 of the Labor Situation in Latin America and the Caribbean (May 2018), both United Nations agencies highlight that according to their projections, between 2015 and 2050 the proportion of people aged 60 and over in the labor force would increase from 7.5% to 15.0%. The aging of the population and, to a lesser extent, a moderate increase in the labor participation of older adults would contribute to this.

Despite recent advances in the formalization of employment and the expansion of contributory pension systems, according to data from eight countries in the region, on average still 57.7% of people aged between 65 and 69, and 51.8% of people 70 years of age and older do not receive a pension from a contributory system, with even higher rates for women.

This situation forces many older people to work: the employment rate for all people aged 60 and over reaches 35.4% in the region, explains the study. This proportion is still high in age groups that have already passed the legal retirement age: 39.3% in the group of 65 to 69 years and 20.4% in the group of 70 and over. Rates are higher in countries with low coverage of contributory pension systems, the report explains.

ECLAC and ILO emphasize that self-employment is the main source of income among older people who continue to work. This may reflect both the discrimination that hinders access to wage employment for the elderly, and the desire of these people to work independently taking advantage of the qualifications acquired throughout their working lives to work in conditions that allow greater flexibility from work. In addition, the study shows that a high proportion of employed older adults work in agriculture where the coverage of pension systems is usually low.

The study also detects that 7.2% of people aged 60 and over are working despite receiving a pension from a contributory system, which may be due to the low perceived amount or the preference to remain active, especially among people of higher educational level.

"It is necessary to expand the coverage of pension systems and supplement them with non-contributory pensions, in order to reduce the pressure that older people are subjected to, which forces them to continue working, generally in low-productivity jobs, in order to to be able to count on minimum means of subsistence at an age when societies should guarantee them the conditions to enjoy a dignified old age ", indicate Alicia Bárcena, Executive Secretary of ECLAC, and José Manuel Salazar, Regional Director of the ILO in the prologue of the publication.

In relation to the current general labor situation in Latin America, the ECLAC-ILO report explains that in 2018 the region is experiencing a phase of modest economic recovery and an estimated growth of 2.2%, compared to the 1.3% reached in 2017. In this context, the agencies project a slight increase in the regional employment rate, which would imply that, for the first time since 2014, there would be a slight decrease in the urban unemployment rate to around 9.0% ( after registering 9.3% in 2017, the highest level since 2005). This evolution of employment, together with the fact that real wages would continue to rise moderately, would contribute to strengthen the purchasing power of households, thus contributing to stabilize the economic recovery.