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Micro-Pensions in India: Issues and Challenges
Abstract
This article aims to fill a gap in the social security literature on India by examining the role of micro-pensions. The analysis suggests that because of the heterogeneity of the target population, micro-pension products with microfinance institutions (MFIs) as the main, but not only sponsors should be voluntary and portable and permit experimentation in their design and in the delivery of services. Accordingly, decentralized micro-pension schemes that operate within an appropriate regulatory framework and according to sound governance practices are deemed more fitting for the Indian context than centralized schemes with limited flexibility. The article discusses two case studies of recently-initiated micro-pension schemes in India, which reveal the need for rigorous analytical research on the micro-pension sector, particularly concerning the structuring of pay-out options and innovative delivery mechanisms. The article concludes that micro-pensions have the potential to be one of the most useful components in India's multi-tiered social security system, and should be encouraged.
... Micro Pension Schemes are typically designed as a defined contribution scheme which basically operates on the principle of voluntary savings to accumulate annuity over a long period (Shankar and Asher, 2009). The savings are invested through financial and capital markets by a professional fund manager and an agreed upon withdrawal age, usually between the age of 58 to 60 years so that the accumulated balances can be withdrawn either in a lump sum, a phased withdrawal, annuity or some combination of these options (Asher and Shankar, 2007). ...
... A Micro Pension Scheme is such that an investor, in this case an informal or low wage worker, voluntarily deposits a certain defined amount of premium for up to 25 years or more with the expectation that the collected premium will be invested and the earned interest will be paid as an annuity sometime in the future. As stated by Shankar and Asher (2009), the concept of Micro Pensions is at its early development stage but a Micro Pension plan needs to address longevity, investment and inflation risks by specifically bearing the low income in mind. Also industry experts suggest that, there are two typical objectives of such Micro Pension Schemes which are; reducing poverty and eliminating the risk of rapidly falling living standards at old age, and protecting the elderly from economic and social crisis (Arunachalam, 2007;Shankar and Asher, 2009). ...
... As stated by Shankar and Asher (2009), the concept of Micro Pensions is at its early development stage but a Micro Pension plan needs to address longevity, investment and inflation risks by specifically bearing the low income in mind. Also industry experts suggest that, there are two typical objectives of such Micro Pension Schemes which are; reducing poverty and eliminating the risk of rapidly falling living standards at old age, and protecting the elderly from economic and social crisis (Arunachalam, 2007;Shankar and Asher, 2009). ...
Market and state based pension schemes in Ghana tends to be better adapted to formal conditions and this limits the participation of majority of the populace especially those in the informal sector of the economy. In cases where " an all inclusive " schemes are developed, no special consideration is made to better integrate low income earners or workers in the informal sector into such pension schemes. Informal workers and their respective households run high risks of falling into old age income insecurity trap. However, long term savings products like micro pensions which is a rather new concept has been developed to bridge the gap and inefficiencies in the open market and state based pension's schemes in providing old age income security for low income earners. The study was a hypothetical exploratory research to identify underlying factors explaining four urban informal groups (beauticians, drivers, vegetable farmers and woodworkers) decision to participate in a Micro Pension Scheme. A Binary Logit regression model was subsequently used to estimate the factors influencing the participation decision. The survey found a high (87.75%) willingness to participate among the urban informal workers. The empirical results of the Binary Logit model reveal that socioeconomic variables including age, years of schooling, marital status, household size and health status, other income sources, assets, investments, and taxes/levies were important in explaining the decision of an urban informal worker to participate. At the individual economic activity level, having a driving license or being a private minibus transport driver or taxi driver has a negative influence on willingness of drivers to participate. In the case of vegetable farmers, location of production as well as rearing livestock alongside crop production also has a negative influence on participation. Further, the results indicate that the woodworker producing for the local market has a positive influence on a woodworkers' willingness to participate in the scheme. These results have policy implications for the development and the design of Micro Pension Schemes for the informal sectors in developing countries
... Many of these older persons work in the unorganized sector, and as such, lack the identification and proof of employment documents required for accessing basic financial services. Nevertheless, current research estimates that about 80 million of these workers are capable of saving for retirement and the untapped savings are in the order of US $2 billion (Shankar and Asher, 2011). ...
... Examples of related empirical work in the literature include Ashraf et al. (2006), which explains the impact of commitment devices; Karlan et al. (2016), which examines mental accounting; and Dupas and Robinson (2013), which studies the impact of access to saving technologies. Specific to the Indian context, recent work has also examined the marketplace for defined contribution retirement schemes targeting informal sector workers (Nelson, 2012;Shankar and Asher, 2011). ...
... Many of these older persons work in the unorganized sector, and as such, lack the identification and proof of employment documents required for accessing basic financial services. Nevertheless, current research estimates that about 80 million of these workers are capable of saving for retirement and the untapped savings are in the order of US $2 billion (Shankar and Asher, 2011). ...
... Examples of related empirical work in the literature include Ashraf et al. (2006), which explains the impact of commitment devices; Karlan et al. (2016), which examines mental accounting; and Dupas and Robinson (2013), which studies the impact of access to saving technologies. Specific to the Indian context, recent work has also examined the marketplace for defined contribution retirement schemes targeting informal sector workers (Nelson, 2012;Shankar and Asher, 2011). ...
Using new data from a field experiment in India, we test hypotheses about micropension design in a poor population. We elicit demand for the basic micropension in addition to variants with different minimum withdrawal ages, government match rates, and options for lump sum withdrawal. A majority (80%) of respondents report interest in the micropension, and the amount they are willing to contribute would be enough to cover about 40% of expected old-age consumption. We find that prospective policyholders value the inability to access the assets until a particular age. We also find that they respond positively to the government match rate.
... Financial education and community-based assistance may be required to reach hardto-reach communities effectively. Developing countries such as Ghana, Pakistan, and Myanmar, where access to old-age pensions is limited, can improve their financial literacy and awareness of pensions by shifting from day-to-day planning to longterm planning [72]. Pension scheme members with investment options are exposed to significant risks. ...
The rapid growth of the elderly population is a major global demographic and social issue. Unfortunately, there is a shortage of pension plans and social security programmes for this population in developing countries, which has severe consequences for their quality of life and well-being. In this article, we aim to better understand the pension systems in developing country contexts such as Ghana, Pakistan, and Myanmar by reviewing official government materials (for example, pension reports) and the published literature to suggest relevant policy recommendations. We observed several policy implementation gaps and inequities in pension schemes for older people, specifically for informal and private sector workers. Considering the size of formal versus informal economies and the level of development index of each country, we suggest a wide variety of options for pension policies, financing, designing cash benefits, and pension payments to cover all older citizens. This article addresses the unmet needs of the elderly and their wider economic sustainability to ensure social justice and resource utilisation. Governments in developing countries should embrace and establish unique, inclusive, and friendly policies encompassing the informal sector to warrant older adults’ functional and social well-being with dignity and honour.
... Financial education and community-based assistance may be required to reach hard-to-reach communities effectively. Developing countries like Ghana, Pakistan, and Myanmar, where access to old-age pensions is limited, can improve their financial literacy and awareness of pensions by shifting from day-to-day planning to long-term planning [73]. Pension scheme members who have investment options are exposed to significant risks. ...
The rapid growth of the elderly population is a major global demographic and social issue. Unfortunately, there is a shortage of pension plans and social se-curity programmes for this population in developing countries which has severe consequences for their quality of life and planetary health (PH) wellbeing. In this article, we aimed to better understand the pension systems in Ghana, Pakistan, and Myanmar, by reviewing the official government materials (such as pension reports) and published literature. We observed several policy implementation gaps and inequity in pension schemes for older people, specifically for informal and private sector workers. Considering the size of formal versus informal economies and the level of development index of each country, we suggest a wide variety of options in pension policies, financing, designing cash benefits and pension payments to cover all older citizens. This article addresses an unmet need of the elderly people, their wider environmental and economic sustainability to ensure social justice and resource utilization. The governments of developing countries should embrace and establish unique, inclusive, and friendly policies encompassing the informal sector to warrant older adults’ functional and planetary wellbeing with dignity and honor.
... When interpreting these results against the background of the discourse on migrants as better development agents, the enthusiasm about remittances as development "mantra" (Kapur, 2004) must be questioned. The most important stream of remittances, the support of parents, is a necessity, compensating the lack of pension schemes (Shankar & Asher, 2011). The support of family members for education and charitable activities (education, childcare, and health) contributes to the social advancement of the beneficiaries. ...
Indian nationals are a small but quickly growing migrant group in Germany that merits more research, especially related to remittance behaviour. Most of them are embedded in transnational networks; the remittances they send to India are an important way of expressing belonging, allowing the remitters to induce changes and fulfil traditional roles in spite of being physically absent. The findings presented in the paper's empirical section were collected with a mixed‐methods‐research approach. They are discussed against the background of the ongoing discourse on remittances and development. The idea of remittances as a better form of development aid is questioned.
The article illuminates which types of remittances are important for Indian migrants in Germany, how the practice of remitting depends on the specific migration path, and how it differs between first and second generation. Analysis of the empirical results shows that seven types of remittances are relevant for Indian migrants in Germany. Individual remittances are more important than collective remittances, and parent support is the most important type of remittance. Charitable engagement within this group is highly individualised. The findings illustrate further how the remitting practices change over time—within life course and between generations.
The results of this research show that as remittances for charitable reasons can only be considered as a highly personalised form of temporary engagement, it can be assumed that they hardly create sustainable structures. Individual remittances to family and friends, which are more important in this case study, do not necessarily result in desirable development.
... Social pensions for low-income individuals are rare in South-East Asia (with the exception of Thailand) and vesting periods exceed women's average expected years of employment (Philippines, 10 years; Indonesia, Thailand, and Vietnam, 15 years). Credits are not offered for periods of maternity leave [10]. ...
... Julia Elyachar (2005) and Ananya Roy (2010) critique the commodification and social ties, observing that finance and development capital are leveraged through socially responsible business and that they generate profit by the labor of those same exploited women and subaltern subjects whom their projects are nominally designed to help. Scholarship in social work that examines microfinance and gender equality has also argued that financial services alone are unlikely to generate empowerment unless coupled with intervention in other areas of socioemotional life (Krenz, Gilbert, & Mandayam, 2013;Shankar & Asher, 2011;Thomas & Sinha, 2009). Exhaustive preoccupation of microfinance with the economic dimension of social life leads to neglecting noneconomic forms of empowerment (Barker, 2005;Bergeron, 2006). ...
Based on the philosophy of Yunus—founder of the Grameen Bank model and Nobel Prize laureate—microfinance has been globally upheld as a neoliberal panacea for addressing poverty and income disparities. Despite these advances, microfinance—as a key policy tool for increasing well-being, social mobility, and capital markets in the underserved communities of the Global South—has not yet been evaluated for its effects in empowering women with disabilities. I draw from disability studies, feminist studies, and social work to examine the ethnographic phenomenon of disabled women who, despite dire poverty, take the unexpected strategic step of collectively refusing to accept microfinance loans. I argue that the individualizing, market-oriented logic of microfinance comports standards of compulsory able-bodiedness that are contradicted by disability as a reality that is experienced through relational kinship ties in rural India. This suggests that approaches to social work in microfinance and disability should attend to cultural aspects of power that manifest through beliefs about gender, ability, and kin-based relationality, beliefs which may sit uneasily with western cultural norms of autonomy, empowerment, and individual agency purported by neoliberal development programs. Finally, this article sheds light on the current development models and social work interventions in the public sphere, which tend to be ill-suited to redress the conditions of impairment that affect disabled women, and invites us to reimagine the domestic sphere as a domain of emergent dependencies and agentive possibilities.
... These saving schemes do not yet comprise any compulsory annuity of the accumulated funds as are known in more developed financial markets, due to the lack of reliable data on mortality rates of workers in the informal, unorganized and rural economy. This lack of mortality tables is a major stumbling block to develop appropriate micropension products (Shankar and Asher 2011). Another risk politicians and those involved in NGOs like to stress, is the turmoil in financial markets that can generate pension fund losses, unaffordable for the poor. ...
In rapidly ageing countries, increased life expectancies threaten the poor and low-income workers. India is such a country. The number of people over sixty will rise from the present 90 million to an expected 200 million by 2030. Giving the changing demography, family structure and settlements the need for pension products is increasing. This counts particular for women since they live longer and have less opportunities to create a pension by lack of formal labour force participation. This paper focuses on recent initiatives taken in India to analyze the improvement of the pension coverage and its capacity to prevent women’s old age poverty. How can the low pension coverage in India - in particular for low-income female workers in the informal economy -, be increased? The research focuses on new pension schemes introduced by the Indian Government and new micropension provisions by grass root non-governmental organizations (NGOs) and microfinance institutes (MFIs). Results from the case-study show, that only about 6 % of the clients of the Dhan Foundation (NGO) stated to have access to pension. This is in line with the national statistics. The pilot initiative for a micro pension program of the Dhan Foundation, show a clear positive result in willingness to pay for micro pensions among their mostly female clientele To improve the low coverage rate, micropensions could be of significant added value in the so called ‘multi-pillar approach’ that recognizes the complementarities between the state pension, the private sector and the civil society sector pension plans.
... Informal workers' characteristics that alienate them from formal pension arrangements include; their continuous change of jobs, frequent opts to self employment, temporary nature of their employment contracts, they live in remote rural areas or urban slums, they are often illiterate and unfamiliar with the concept of pensions and they have little experience of dealing with formal financial institutions (Uthira & Manohar, 2009). Micro-pension schemes support small, regular and sustainable savings by low income earners and provide them with a regular stream of income for the old-age (Shankar, 2009;Uthira & Manohar, 2009) and can therefore be viewed as smart forms of savings and insurance (Dullemen & Bruijin, 2011). ...
Micro-pension plans are meant to insulate low income earners against old-age poverty. The formulation of such plans requires a delicate balance between economic viability, generation of adequate returns and customized features for the participants. This study sought to determine the pragmatic models for implementation of micro-pension plans, regulatory issues surrounding their operations, challenges to implementation and the strategies that can address the challenges. The data, collected from 1083 informal sector participants, 30 Micro-finance institutions and 20 Savings and Credit Cooperative Societies in Kenya was analyzed by use of factor analysis and visual binary approaches. The study concludes that the ideal micro-pension scheme needs to address governance, administrative, design and efficiency issues to succeed and recommends a multi-model implementation of micro-pension plans in addition to a separate set of regulations to govern the micro-pension plans.
... UTI's micro-pension program involves an administratively and financially competent third party-a cooperative, a microfinance institution, or an NGO-whose job it is to attract large numbers of members with shared characteristics, to channel communications between members and UTI, and to conduct administrative functions [8]. UTI manages the fund. ...
Social protection schemes often fail to adequately protect women. Examining how women’s needs for social protection differ from those of men and what schemes have successfully reached women is important for understanding how to design social protection for women. Women are more likely than men to work in the informal sector and to drop out of the labor force for a time, such as after childbirth or because of social norms, so their needs can often be greater than those of men. This combination of factors undermines productivity, increases women’s vulnerability to income shocks, and makes it harder for them to save for old age.
To reach women and mitigate these risks, social protection programs need to reflect the features of women’s daily lives. Women need to be offered flexible work times, services within easy reach of home, and assistance with child and elder care. Low levels of literacy need to be accommodated, and documentation requirements eased. NGOs are often well placed to harness local knowledge and so are able to draw the most vulnerable women and design projects to reflect local needs. To learn more about how to reach women and the kinds of programs that are effective for them, studies need to compare the reach and impact of programs designed specifically for women with other programs and to evaluate how well integrated insurance schemes provide social protection to women.
... It does not cover micropensions, which are microsaving instruments facilitating voluntary saving for old-age. Existing micropension schemes in South Asia typically fail to cover longevity risks (Rutherford 2008;Shankar & Asher 2011). 3. The largest cross-country comparative study of pension schemes done to date finds that the most common feature of pension schemes is that they ensure retirement (Mulligan & Sala-i-Martin 1999). is to offer an assessment the potential role of social pensions in the Asia region, and the policy trade-offs involved, informed by insights from theory and the international experience. ...
Rapid population ageing and economic transformation in Asia underline the policy challenges associated with ensuring income security in old age. This article examines the potential role of social pensions in securing old-age income security in Asia. It assesses the main policy trade-offs associated with adopting alternative social pension designs, especially around two critical policy points: the comparative advantages of social assistance and social pensions; and the integration of non-contributory transfers within advanced contributory pension schemes.
... Existing micropension schemes in South Asia typically fail to cover longevity risks (Rutherford 2008; Shankar and Asher 2011: 1–21). 4 HelpAge International's Pension Watch has an interactive map with information on countries with social pensions. ...
Rapid population ageing and economic transformation in Asia raise the policy challenge of ensuring income security in old age. There is growing interest among policymakers in the potential role of noncontributory transfers as an instrument to address a variety of policy challenges, including old age poverty and vulnerability, rapid population ageing, the effects of migration on intergenerational family support structures, and the effects of informality on social protection systems. The main objective of this paper is to explore the potential role of social pensions and other noncontributory schemes in Asia, informed by insights from theory and international experience. The paper identifies alternative forms of providing income security in old age, including social pensions. It also examines the welfare effects of adopting alternative social pension designs, especially around two key policy nodes : the comparative advantages of social assistance and social pensions, and the integration of noncontributory transfers within advanced contributory pension schemes.
Life cycle asset allocation has recently gained popularity and is the default option in pension funds worldwide. A line of recent studies has refuted its glory and argues that a balanced fund with a fixed allocation throughout the investment horizon may yield better results. The question arises from these studies: What should be the balanced fund’s optimum asset allocation weight? Therefore, the present study uses Genetic Algorithm to obtain the optimum asset allocation weight for India’s defined contribution pension plan subscribers. To validate our result, the study compares the results of a Genetic Algorithm to the outcomes of widely used asset allocation techniques, notably the life cycle and equally weighted strategies. This study holds important policy implications as, given the size of the pension asset and the long investment duration, even a trivial increase in return will substantially impact investment outcomes, affecting the subscribers’ well-being in old age.
The study investigated the effect of institutional mechanisms of micropension saving (MPS) schemes in extending coverage to informal economy workers. We used mixed methods as the research approach, and collected both quantitative and qualitative data for analysis. Using principal component analysis, multiple regression analysis and interpretative approaches that yielded themes, we concluded that more access provision, incentives and security result in increased informal economy workers’ participation in MPS. However, general form of financial information to informal economy workers was found to demotivate enrolment onto the scheme. Consequently, we recommended that corporate pension trustees should create institutional structures like pension education campaigns on national television and radio to promote the culture of pension saving.
Rapid ageing presents an unprecedented policy challenge for the provision of social security, especially for lower income countries. These challenges have been exacerbated by the current fragile global macro-economic environment on one hand, and domestic public policy constraints on the other. There is, however, increasing consensus among policymakers and stakeholders on the role of social safety nets in protecting the vulnerable against adverse shocks, and on the role of social security systems in fostering economic growth and development. The main functions of any retirement programme, usually referred to as a social security system, are to smooth out consumption over a lifetime, to ensure that retirement benefits last until death and are sufficient to avoid poverty in old age on a universal basis.
India's far-reaching civil service pension reforms in 2008 provided its fragmented and diffuse pension system a unifying organizing framework. The design and architecture of the reformed civil service program, the National Pension System, was subsequently extended to those employed in private formal and informal sectors. The article assesses India's pension reforms and identifies challenges for the National Pension System in providing old-age income security. The article also presents estimates for universal social pension scheme and argues that its implementation is constrained by political factors and not necessarily by fiscal constraints. Copyright © 2014 John Wiley & Sons, Ltd.
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D er M bao P ension P lan ist ein freiwilliger S parplan mit individuellen K onten, an dem alle A rbeitnehmer in K enia ungeachtet ihres E inkommens oder ihres Alters teilnehmen können. Ziel des M bao V orsorgeplans ist es, ein für die spezifischen E igenschaften des informellen S ektors geeignetes P rogramm zur V erfügung zu stellen sowie eine S parkultur bei diesen Arbeitnehmern zu fördern. Die wichtigste Neuerung besteht darin, dass A rbeitnehmer mit niedrigem Einkommen ihre Beiträge auf einfache und relativ kostengünstige Art und Weise leisten können, da diese gering sind und der Saldo tief ist. Mithilfe ihres Mobiltelefons können die Beitragsleistenden ihre Beiträge jederzeit und von jedem beliebigen Ort aus einzahlen. Diese Neuerung wurde dank technischer Innovationen möglich gemacht, welche die K osten von M obiltelefonen und N utzungsgebühren massiv verbilligt haben, sowie durch die innovativen mobilen G eldtransaktionen. D er S parplan wird von Unternehmen des privaten S ektors angeboten.
The Mbao Pension Plan is a voluntary individual account savings plan to which all workers in Kenya may contribute without regard to income or age. It is designed to provide a programme that is suitable for the unique nature of the informal sector and to encourage a savings culture for those workers. The key innovation is that low‐income workers can easily make small contributions at relatively low cost, considering the small contributions and small account balances. Participants can conveniently make contributions anytime and anywhere using their cell phones. This savings innovation is made possible by technological innovations that have reduced the costs of cell phones and airtime, and by the entrepreneurial innovation of mobile money. The plan is provided through private‐sector businesses.
Although social security retirement programmes have been established in many developing countries, they cover only a small proportion of the elderly population. The situation will become more pressing as the numbers of needy elderly people increase. Because conventional social security programmes are unlikely to meet their needs in the foreseeable future, the role of alternatives such as micro-insurance should be explored. The article examines recent innovations in micro-insurance designed to protect elderly people and considers their potential to contribute to national efforts to provide social protection to all.
Declining fertility rates and rising life expectancy are driving global demographic change. With an aging world population, both the number and proportion of the aged are increasing. Presently, two-thirds of the world’s older people live in developing countries. By 2050, this will increase to 80%. The number of people aged over 60 in the developing world is predicted to rise from 375 million in 2000 to 1,500 million in 2050 (Gorman, 2004). In Sub-Saharan Africa the number of people aged 60 and over will more than double in the next 30 years, despite the impact of HIV/AIDS (Mark, 2004). Africa’s older population will increase to 204 million by 2050, from the present 42 million (HelpAge, 2005a): more than one in ten Sub-Saharan Africas will be over 60 (Gorman, 2004).
This growth rate of the elderly population will bring economic and social problems, the effects of which will be seen at different levels – from the individual through the continent as a whole. The aged will increasingly face additional crises on two fronts: disintegrating social safety nets and the effects of HIV/AIDS.
As India addresses the challenges of the twenty-first century and manages its rise globally, constructing and implementing a modern social security system represents among the major imperatives. A modern social security system can enable India to cushion the burden on workers of restructuring public and private organizations; to increase the legitimacy of further reforms; and to encourage individuals and firms to engage in entrepreneurship and make creative career choices. All three are essential for India to emerge as a resilient knowledge-driven economy and society. Before enumerating the case for social security reform in India, it may be useful to provide a brief overview of the key concepts and analytical framework involved in designing and implementing social security systems. This will be followed by a discussion on India's current social security system and the specific measures that can be taken to improve the functioning of provident and pension fund organizations. The paper ends with four broad reform themes designed to construct and sustain a modern social security system for rising India.
With growth of the microfinance sector in India, there is a need to regulate it, so as to provide an environment in which all stakeholders can participate with confidence. Both prudential and non prudential regulation is required. Prudential regulation is required to enable some micro finance institutions to provide savings services and affordable remittance services, significant missing links at present. Non prudential regulation encouraging transparent disclosure of interest rates, offering appropriate financial products, fair selling practices and methods for collecting loans is also important.This paper proposes the creation of MFI banks which may be permitted to offer savings as well as mobile payment services, to be regulated by the country’s central bank, the Reserve Bank of India (RBI). In addition, for non prudential supervision for the sector as a whole, an independent oversight board with representation from participants in the sector, the Government and consumer forums, reporting to the RBI is suggested.
We designed a commitment savings product for a Philippine bank and implemented it using a randomized control methodology. The savings product was intended for individuals who want to commit now to restrict access to their savings, and who were sophisticated enough to engage in such a mechanism. We conducted a baseline survey on 1777 existing or former clients of a bank. One month later, we offered the commitment product to a randomly chosen subset of 710 clients; 202 (28.4 percent) accepted the offer and opened the account. In the baseline survey, we asked hypothetical time discounting questions. Women who exhibited a lower discount rate for future relative to current trade-offs, and hence potentially have a preference for commitment, were indeed significantly more likely to open the commitment savings account. After twelve months, average savings balances increased by 81 percentage points for those clients assigned to the treatment group relative to those assigned to the control group. We conclude that the savings response represents a lasting change in savings, and not merely a short-term response to a new product. Copyright (c) 2006 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..
Based on the description of the demographic development of the population, problems concerning the process of aging in India are discussed. The author refers to the changing status of old people in society and within the family structures. Emphasis is placed upon strategies of governmental and voluntary social service systems, especially old age income maintenance and health care. Conclusions for the planning and programming of social services are drawn.
We designed a commitment savings product for a Philippine bank and implemented it using a randomized control methodology.
The savings product was intended for individuals who want to commit now to restrict access to their savings, and who were
sophisticated enough to engage in such a mechanism. We conducted a baseline survey on 1777 existing or former clients of a
bank. One month later, we offered the commitment product to a randomly chosen subset of 710 clients; 202 (28.4 percent) accepted
the offer and opened the account. In the baseline survey, we asked hypothetical time discounting questions. Women who exhibited
a lower discount rate for future relative to current trade-offs, and hence potentially have a preference for commitment, were
indeed significantly more likely to open the commitment savings account. Mter twelve months, average savings balances increased
by 81 percentage points for those clients assigned to the treatment group relative to those assigned to the control group.
We conclude that the savings response represents a lasting change in savings, and not merely a short-term response to a new
product.
This series of annual reports on the microfinance sector in India which seeks to document developments, clarify issues, publicize studies, stimulate research, identify policy choices, generate understanding, and enhance support for the sector. It highlights recent developments under each of the two main models of microfinance in India – the SHG and MFI models. The book highlights recent developments in Self Help Groups (SHGs) and SHG Bank Linkage Programme (SBLPs), and focuses on microfinance with regard to the investment scenario in India.
The Pension Crisis concerns the changing demographic profile of the economy: an increasing number of elderly persons supported by fewer young people. Governments around the world are responding to this impending crisis by shifting their pension policies away from pay-as-you-go systems towards individual savings schemes. These savings need to be converted into a pension at retirement, and annuities provide this function. This book is a comprehensive study of annuity markets. The book starts by outlining the context of public policy towards pensions, and explains the different types of annuities available, focusing on the UK which has the largest annuity market in the world. It examines how annuities are priced, and describes the techniques of mortality measurement. As a background, it provides a history of annuities, and the experience of annuity markets in a number of other countries. The book outlines the economic theory behind annuities, and explains how annuities insure consumers against longevity risks. It goes on to describes how annuities markets function: how they work, and whether they are efficient, leading onto a discussion of the annuity puzzle. The book concludes by discussing the regulatory framework, assets available to back annuity liabilities, and recent developments in annuity markets. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/management/9780199216994/toc.html
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