Non-contributory Pension Programs and Intra-Household Inequality

José L. Casco

No 2026-06, Working Papers from Banco de México

Abstract: Non-contributory pension schemes are increasingly prevalent as countries seek to combat poverty, yet their role in shaping inequality remains underexplored. This paper studies how such programs alter intra-household inequality using data from Mexican household income and expenditure surveys. The analysis first examines a local pension program in Mexico City, embedding an age-based quasi-experimental design to identify beneficiaries within a structural model of extended households. Results show that the program shifted resources from men to women and children, increasing women's bargaining power and improving the living standards of children and women by reducing their poverty rates. The paper then examines the national expansion of non-contributory pensions, exploiting regional variation in roll-out across states and the introduction of a federal program. The redistributive patterns observed in Mexico City are also evident nationally, although program effectiveness varies, with differential impacts on promoting gender equity and benefiting children.

Keywords: Non-contributory Pensions; Resource Shares; Control of Resources; Inequality (search for similar items in EconPapers)
JEL-codes: D10 H55 J14 J16 J26 (search for similar items in EconPapers)
Date: 2026-10
New Economics Papers: this item is included in nep-age
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Persistent link: https://EconPapers.repec.org/RePEc:bdm:wpaper:2026-06

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