Thus far, the World Bank has had limited, but important involvement in aging issues with its client countries. This limited involvement reflects the fact that most of the Bank's poorer clients have a relatively young population, so that the current lending program is focused mainly on the needs of the younger age groups, such as poor mothers and children. At the same time, age composition is changing rapidly in these countries, and there is need to plan ahead for the aging of their populations. Aging is already occurring in various Latin American countries and the transition economies in Central and Eastern Europe and this has served as the background for the Bank's seminal work on pension reform (World Bank, 1994) and brought about the increasing emphasis on aging issues when dealing with social development and the gender dimension of the Bank's work. With the accelerated aging in many client countries (such as China or Sri Lanka), aging is entering increasingly into Bank non-lending and lending-activities (such as analytical work and technical assistance, and preparation of PRSP/PRSC). Based on the recognition that the elderly, particularly women, are among a population's most vulnerable, that the share of the elderly is rising and that changing social structures are increasing their vulnerability, the impact of urbanization and reduced access to traditional risk management instruments is shaping the World Bank's thinking and work. This will greatly influence the Bank's future work program in many areas such as labor markets, health, education and infrastructure investment.
Aging and Old-Age Income Support
The initial emphasis on a public pension scheme for formal sector workers and the need for reform of this scheme was dictated by high and often rising pension expenditures in the transition economies and the dysfunctional and often deficitary schemes in most client countries worldwide. A comprehensive research effort (World Bank, 1994) prompted the World Bank proposal for a multi-pillar pension scheme and a suggested mixture of financing (unfounded/funded), benefit types (defined benefit/defined contribution) and administration (public/private). As it turned out, the proposed multi-pillar scheme became a benchmark rather than a blueprint for the Bank's work with client countries (over 60 so far), and the work on best design and implementation for a public scheme is ongoing (see Holzmann and Stiglitz, 2001).
While the support of countries to reform the public scheme continues because their financing needs often crowd out other social expenditures (such as education and health), the share of people covered by formal sector schemes is typically very small (some 10 to 20 percent in the Bank's poorest client countries). This has triggered work with client countries to investigate the design and implementation of non-contributory schemes for the life-time poor, micro-insurance schemes for the low-income groups, and enhanced access of the large share of informal sector workers (the current non-poor, but potential future poor when old) to market-based financial instruments for old-age income. Investigation of the complicated issue of "coverage" under old-age income support schemes has become prominent in the Bank's work.
Aging and Social Development
Issues of aging are primarily being addressed within social assessments. Social assessments are the main instrument used by the Bank to ensure adequate treatment of social dimensions in Bank-financed operations. They rely on social analysis to understand key social issues and risks and to determine social impacts on different stakeholders. The instruments used for social assessments include socio-economic surveys, stakeholder analysis, focus groups, participatory poverty assessments, beneficiary assessments, in-depth case studies, participatory rapid appraisals, and social audits.
In the particular case of aging, the systematic investigation of relevant demographic factors within social assessments is undertaken in order to account for the social differences, assess impact and risks, mitigate adverse impacts, and build capacity of institutions and individuals. Social Development (SD) staff have been conducting social assessments that take into consideration the effects of Bank projects on elderly people. One prominent example from 1999 is the report from SD staff in the ECA Region (World Bank, 1999).
Aging and Gender Issues
The proportion of persons aged 60 years and older throughout the world is expected to more than triple in the next half century. According to UN projections, 72 percent of the population over 60 years of age will be living in developing countries by the year 2025. The majority of aging people are women. Today, there is an estimated 81 men for every 100 women over 60. At age 80, this ratio decreases to 53 men for every 100 women. An aging, mostly female population has important implications for the World Bank's work to reduce poverty.
Elderly women and widows heading households or living alone face a particularly high risk of being poor. This evidence is valid for both developed and developing countries, and there are several reasons to that (World Bank 2001), including: (i) Older women tend to have poorer access to productive assets, such as land, capital, credit, technology and extension services. They tend to have weaker property rights and fewer savings than men. They are less likely to be in the labor force or to have pension income. When they are in the labor force, they tend to have lower wages and shorter pension accumulation times. (ii) Older women are less likely than men to have economic support through marriage (worldwide, approximately 79 percent of men aged 60 and older are married, compared with 43 percent of women). (iii) In some societies, widows face cultural constraints that limit their ability to ensure a basic standard of living in old age. The erosion of the traditional support to widows in many countries further increases their risk of being poor. The gendered nature of aging and its implication for development has been recognized in several international fora. For example, the Beijing Declaration and the Beijing Platform for Action adopted in 1995 and reaffirmed in 2000 recognized that women face barriers to full equality and advancement because of certain factors, including age. As the World Bank moves forward, the different needs and constraints facing aging women and men need to be increasingly taken into consideration when designing projects and policies. Several studies on the links between gender and aging have been produced by the World Bank.
The World Bank's Participation in UN Population Conferences
The Bank was actively involved in both the Cairo International Conference on Population and Develop-ment (ICPD) in 1994 and the ICPD+5 follow-up in 1999. For ICPD 1994, staff prepared a Board paper on the Bank's work in population (World Bank, 1994b) that included a discussion of the changing demographics around the world. Issues of rapid change in age structure and the implications for providing health and social benefits for an aging population in countries experiencing this process were mentioned, though aging was not the central focus. The shift from top-down, demographically-driven approaches in poor countries (India, China) to a rights-based and client-centered approach was the main topic of discussion and debate.
For ICDP+5 1999, the Bank tied its input with the preparation of the Population Sector Strategy Note which was used for the "plus-five" meetings at the February 1999 Hague Forum and again at the Special UN Session in New York the following June. The challenges and opportunities for countries with rapidly changing age structure were addressed briefly in the document, but the main message was that countries moving quickly through their demographic and epidemiological transitions have a window of opportunity created by low age dependency (when childhood dependency has fallen, but older-age dependency has not yet risen) to put their social support systems on sound financial and organizational foundations, and that countries who fail to do this may miss the opportunity because it only occurs once.
The Bank intends to participate actively in the Madrid conference, to learn and to provide input into the discussion. The aging of populations and the resultant challenges for social programs and the dynamics of economies at large will undoubtedly move to center stage of the World Bank's future work with its clients.
Selected World Bank Publications on Aging Issues
- Bertranou, Fabio. 2000. Pension Reform and Gender: The Argentina and Chile Experiences. Latin American and Caribbean Region. World Bank, Washington, D.C.
- Estelle, James. 2000. Gender, Old Age & Social Security: Evidence from Chile & Argentina. Latin American and Caribbean Region. World Bank, Washington, D.C.
- Lampetti, Julian A., and Linda Stalker. 2000. Consumption Expenditure and Female Poverty: A Review of the Evidence. Background paper for Engendering Development. World Bank, Washington, D.C. Available on line at http://www.worldbank.org /gender/prr/wp11.pdf.
- World Bank (1994a): Averting the Old-Age Crisis: Policies to Protect the Old and Promote Growth, New York (Oxford University Press).
- World Bank (1994b): Population and Development: Implications for the World Bank, Washington, DC. (World Bank)
- World Bank (1999): Older People in Transition Economies: An Overview of their Plight in the ECA Region, Environmentally and Socially Sustainable Development, Washington, D.C. (World Bank).
- World Bank (2001): Engendering Development - Through Gender Equality in Rights, Resources, and Voice. Gender and Development Group, PREM and the Economic Research Group in DEC. A co-publication of the World Bank and Oxford University Press.
- Holzmann, R. and Stiglitz, J. (2001, eds.): New Ideas about Social Security, Washington, D.C. (World Bank).