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A public micro pension programme in Brazil: heterogeneity among states and setting up of a benefit age adjustment

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Abstract

Brazil is the 5th largest country in the world, despite having a “High Human Development”, it is the 9th most unequal country. The existing Brazilian micro pension programme is one of the safety nets for poor people. To become eligible for this benefit, each individual must have an income that is less than a quarter of the Brazilian minimum wage and be either over 65 or considered disabled. That minimum income corresponds to approximately US $\(\,2\) per day. This manuscript analyses quantitatively some aspects of this programme in the Public Pension System of Brazil. We look for the impact of some particular economic variables on the number of people receiving the benefit, and seek if that impact significantly differs among the 27 Brazilian Federal Units (UF). We search for heterogeneity. We perform a regression and spatial cluster analysis for detection of geographical grouping. We use a database that includes the entire population receiving the benefit. Afterwards, we calculate the amount that the system spends with the beneficiaries, estimate values per capita and the weight of each UF, searching for heterogeneity reflected on the amount spent per capita. In this latter calculation we use a more comprehensive database, by individual, that includes all people that started receiving a benefit under the programme between January and April 2018. We compute the expected discounted benefit and confirm a high heterogeneity among UF’s as well as by gender. We propose looking for a more equitable system by introducing “age adjusting factors” to change the benefit age.

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Acknowledgements

Authors gratefully acknowledge the financial support from FCT/MCTES—Fundação para a Ciência e a Tecnologia (Portuguese Foundation for Science and Technology) Project CEMAPRE/REM—UIDB/05069/2020 financed by FCT/MCTES through national funds. Special thanks to the Superintendence of the INSS who provided the data Authors thank anonymous referees for their contribution in improving the manuscript.

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Authors and Affiliations

  1. ISEG and CEMAPRE, Universidade de Lisboa, Lisbon, Portugal

    Renata G. Alcoforado & Alfredo D. Egídio dos Reis

  2. Department of Accounting and Actuarial Science, Universidade Federal de Pernambuco, Recife, Pernambuco, Brazil

    Renata G. Alcoforado

Authors
  1. Renata G. Alcoforado
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  2. Alfredo D. Egídio dos Reis
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Correspondence to Renata G. Alcoforado.

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Appendix

Appendix

See Table 3 and Figs. 32, 33, 34, 35.

Table 3 UF’s with codes and life expectancies
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Fig. 32
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Spacial clusters

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Fig. 33
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Fit for the social support for the elderly and disabled

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Fig. 34
figure 34

Fit for the social support for the elderly

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Fig. 35
figure 35

Fit for the social support for the disabled

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Alcoforado, R.G., Egídio dos Reis, A.D. A public micro pension programme in Brazil: heterogeneity among states and setting up of a benefit age adjustment. Eur. Actuar. J. 13, 427–467 (2023). https://doi.org/10.1007/s13385-022-00319-z

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  • DOI: https://doi.org/10.1007/s13385-022-00319-z

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