What's new in this year's Global AgeWatch Index?

This post by the Jane Scobie, Director of Communication and Advocacy at Help Age International provides an overview of the 2014 Global AgeWatch Index. This blog is part of the Wikiprogress series on ‘Engaging Citizens with Well-being Statistics’.

What happens to people when they get to 60?

It's a little discussed subject. Data broken down by age is limited, but bringing together what is available from the UN, World Bank and Gallup gives us a snapshot of what is happening to older people now and how we can change things for the better.

The Global AgeWatch Index brings together data on income, health, employment, social connections and personal security into one number and ranks countries accordingly. The ranking is accompanied by a global report - this year focusing on income security in old age - and country report cards that highlight innovative responses by government, growing citizen action and some frightening gaps in policy.

 New questions and insights

• What makes China and Bangladesh rank higher than India? How do people fare in the lowest ranked countries - Afghanistan, West Bank and Gaza and Malawi?

• Why does Bolivia do so well in comparison? Why is Turkey, a country with high economic growth, so far behind Mexico?

• What are the emerging issues facing governments at the top of the Index, Norway, Finland, Ireland and Argentina, where populations aged 60 plus make up between 15% and 26% of the total?

These are some of the questions the Index explores.

Two new features of the 2014 Global AgeWatch Index help explain the issues behind the figures.

Included in our country report cards are radar charts that benchmark individual countries against regional averages. And 34 of the report cards include detailed commentaries, written by in-country experts, adding a richness to the data.

Living without a pension

The 2014 Index report points out that 150 million people aged 65 or over in Index countries live without a pension of any kind - For example only 29% of older Indians receive a pension, 4% of older Malawians and barely anyone in Myanmar. However 95% of older Bolivians get a social pension which not only helps them individually but is also credited with reducing household poverty by 13.5%. And 74% of older Chinese now have a pension - that is 130 million people.

The 2014 Index report shows that pension coverage is rising, particularly in Latin America, but adequacy is still a major issue. For example in Kyrgyzstan the pension is worth US$98 a month, US$6 below the subsistence level of US$104. Research shows that heating and other bills eat up to 70% of this income. The situation is compounded by low economic activity amongst older people in Central Asia compared to other regions.

The Index measures older people's capabilities through economic activity and educational status. Some 22% of people aged 80-plus are looking for a job in Indonesia, and 92% of people aged 55-64 in Tanzania work. Many people in Colombia aged 60 and over want or need to go on working but face age discrimination. Job adverts routinely specify young applicants, for example.

Global postcode lottery

It is not only which you country you live in that determines your wellbeing in older age. Reports from individual countries show that provincial responsibility for services means that these are often very different in rural and urban areas, depending on local government providers.

For example, supplementary health services in Canada, access to day care centres in Colombia and ambulances services in Kyrgyzstan, vary greatly between different parts of the country.

Rising issues

Caregiver burnout and the demand for individual care and community services to enable people to stay in their own homes in their later years are issues of concern for civil society, governments and professionals the world over.

The transition into old age is inevitable, but it is not adequately being addressed. We hope the Global AgeWatch Index will stimulate demand for better data and debate.

We invite you to explore the report and website to find out more.

This blog first appeared on the Global AgeWatch Index site, here. 

The week in review

Week in review 09.12.2011
Hello, glad you could join us for the Wikiprogress week in review - a handful of headlines that have caught our eyes over the last week. You can find all news articles and blog posts on the progress community in the  Wikiprogress Community Portal. 

On measuring progress
Government drafts 'happiness indicators' to supplement economic data  (The Japan Times 06.12.2011)
At the Asia-Pacific Conference on Measuring Well-Being and Fostering the Progress of Societies, Japan’s Cabinet Office announced a set of indicators designed to gauge well-being based on three major factors — socioeconomic conditions, physical and mental health, and relationships.
See more and contribute to the Wikiprogress article on The Asia-Pacific Conference on Measuring Well-Being and Fostering the Progress of Societies

On inequality
OECD inequality report: how do different countries compare?  (Guardian Data Blog 05.12.2011)
The OECD report on inequality: Divided We Stand: Why Inequality Keeps Rising, released this week shows a rise in the share of top-income recipients in total gross income over the last 30 years in all countries.
Read more and contribute to the Wikiprogress article on inequality

On UK happiness
Richard Layard: And so begins the strange era of feel-good politics... (The Independent 07.12.2011)
Leading progress thinker, Richard Layard, writes about the future of basing policy on how it affects the well-being of the people. He argues that the value lies not in finding the average happiness of the nation, but in what causes people to be happy or unhappy.
See more and contribute to the Wikiprogress article on measuring happiness in the UK

On gender equality

Women and Work – This house believes that a woman’s place is at work (Economist Debate)
Defending the motion in this week’s Economist debate is Linda Basch (President of National Council for Research on Women), who argues work is right for families, communities, the economy and women. Against this motion is Christina Hoff Summers (American Enterprise Institute), who believes women should not have an assigned place and questions what is wrong with the 5 million American women who are full-time mothers.
See more and contribute to the Wikigender article on women and work.



On growth in India
Putting Growth in its Place (Outlook, November)
Amartya Sen and Jean Dreze co-author this essay on growth and development in India stressing that growth should be a means to development but not an end in itself. India is a unique case, even after 20 years of growth it is still among the world’s poorest nations.
See more and contribute to the Wikiprogress article on progress in India

In the Spotlight: Global Corruption Perception Index reflects Arab Spring unrest
That’s all from us this week. We hope you tune in the same time next week. In the meantime, if anything interesting passes your desk that you would like to see in the next Wikiprogress week in review, please tweet it to us  @Wikiprogress  or post it on our  Facebook page.  

Yours in progress,

Philippa Lysaght

Covering the “missing middle” in social protection

by Juan R. de Laiglesia from the OECD Development Centre 

Providing social protection to the informal middle classes will foster social cohesion, and doesn’t cost the earth.

As citizens across the globe demand new economic models, the OECD’s newly released Perspectives on Global Development 2012 puts social cohesion on the table as a broader social development objective. Social cohesion compounds inclusiveness, equal opportunity and a sense of belonging to society, of shared destinies. Strong growth in a large part of the developing world has transformed the ways development challenges can be addressed. 

The final declaration of the 4^th High Level Forum on Aid Effectiveness held in Busan last week reminds us that poverty and inequality remain a central challenge in global development.  The OECD’s Perspectives on Global Development 2012 find that 83 countries more than doubled OECD per capita growth rates over the past decade. You would be right to think that faster than 1.8% growth is hardly impressive; but in fact 49 countries grew at more than 3.75%. In the 1990s, only 12 countries managed that.

How growth has changed the picture

First, the poor no longer live mostly in poor countries. Research by Andy Sumner,  at the Institute for Development Studies , finds that 70% of the world’s poor live in middle income countries. Two decades ago, 93% of the poor lived in Low Income Countries. This means that most of the poor live in countries where per capita incomes are above USD 2.75 a day, and more in purchasing parity terms. In other words, more countries can use redistributive instruments – from taxes to transfers to health provision – to eradicate poverty. Indeed, countries such as India or China have up-scaled social protection interventions in recent years.

Second, millions have been lifted out of poverty as average incomes have increased and emerged as a new – but vulnerable ­– middle class. As a result, half of the 2bn-strong global middle class live in emerging economies. But make no mistake, this middle class is unlike Western stereotypes of a couple with two children, a dog and one or two cars.  The emerging middle classes are vulnerable: many remain only just above the poverty line and do not have a stock of capital that would allow them to buffer major shocks such as illness nor to whether the changes in fortunes which come with old age. In Latin America, less than 10% of households have mortgage loans, and less than half of them are middle-class. Many in the emerging middle classes work informally. And yet, not being poor, they have the capacity to save and contribute to social insurance. Social protection plays a key role in buttressing their middle class status and preventing them from slipping back into poverty.

Social protection redux

Is this a job for social protection? In the past few years, the discourse around the role of social protection in development has changed dramatically. Through the work of the OECD’s Development Assistance Committee, the donor community has clearly stated the role of social protection in making growth pro-poor. Last month, the Social Protection Floor Advisory Group, chaired by Michelle Bachelet released its report entitled Social Protection Floor for a Fair and Inclusive Globalization. Social protection has moved from being viewed as merely a “safety net” built of targeted assistance to the poor to a key instrument in building fairer societies.

The past ten years have seen a true “quiet revolution” in social protection in the developing world. The rapid introduction of means-tested cash benefits has greatly increased the scale of social protection. South Africa’s Child Support Grant, introduced in 1998 covered 7.7 million children by 2008, China’s Minimum Living Subsidy Scheme (DiBao) was introduced in 1997 and reached 57 million households by 2007. The very popular conditional cash transfer (CCT) programmes in Mexico (Oportunidades) and Brazil (Bolsa Família) reach respectively 5 and 12.5 million households or about a quarter of the population in each country. The beauty of this quantum leap is that it has been made using home-grown instruments, tried and tested across developing countries. Often these new programmes coexist with contribution-based social security systems that cover formal employees.

The “missing middle”: a challenge for social cohesion

Put together, contribution-based social security and means-tested social protection for the poor leave a “missing middle” in social protection coverage. Indeed, research at the OECD Development Centre shows that the majority of middle-class workers in emerging economies such as Brazil  or Mexico are not formal employees.  Contributory pensions are open to independent workers and informal employees – those without contracts – but in practice only a minority participate in them. In the case of Brazil only 15% of the self-employed and 9% of informal employees in the middle income quintiles contribute to pensions systems.

Providing adequate instruments for the informal middle classes to insure or manage risk matters for social cohesion. First because today’s vulnerable middle class can become tomorrow’s poor. Many in the emerging middle classes lie close to the poverty line and can fall back in downturns. Second, it is a matter of horizontal equity. Social protection is a form of institutionalized solidarity: excluding certain categories from social protection deprives them of risk management instruments which are usually not available in the private market. Moreover, it runs the risk of alienating that segment of society. Finally, the middle classes have an important role to play in shaping the politics of poverty reduction. How likely are the informal middle classes to side with the poor on redistribution issues if they do not partake in the system that protects the poor?

Extending protection: more than one way forward

Social protection can be extended to cover the informal middle classes in several ways. Unbundling health, pensions and the other functions of social security helps, because they can be priced and provided separately. Contributory pensions and Unemployment Insurance Savings Accounts as implemented in Chile are examples of such unbundling. Certain instruments, like UISAs (compulsory savings accounts from which withdrawals are made during unemployment spells) can be extended to informal workers. Since they pool little risk across workers, they do not entail cross-subsidies or generate incentives to stay out of formal work. Subsidising contributions to the social security system is also possible – for example by governments’ matching deposits into retirement accounts. Matching-defined contribution pensions following that model are being implemented in Mexico, Colombia and Peru. Universal entitlements are also used today across the developing world, especially for basic healthcare and pension income.  In all cases, the key is to break the dichotomy between a social protection system for formal workers and one – or none – for informal workers. Such duality reinforces the segmentation between labour markets and contributes to deepen the fault line between formal and informal workers.

At stake is building a social protection system that not only alleviates poverty, but empowers citizens to build up and protect human capital and to participate in networks of organised solidarity. The past decade saw the emergence of a number of innovative instruments in social protection, born and bred in the South. Making inclusive systems out of these and other innovations remains work in progress.

Social cohesion: making it happen

Today’s post originally appeared on the OECD Insights Blog and is from Anne-Lise Prigent, editor in charge of development publications at OECD Publishing

A famous Deng Xiaoping quote goes : “Let some people get rich first”. Yet, in Spring 2011, the Beijing city authorities banned all outdoor advertisement of luxury goods on the grounds that they might contribute to a “politically unhealthy environment”.

The trouble with growth is that inequalities tend to rise with it. Growth does not necessarily translate into better life satisfaction – far from it, as the experience of Thailand or Tunisia shows. What happens when the fruits of growth are not shared, when people feel that income inequalities are rising and food prices soaring? Well, that’s when the so-called “politically unhealthy environment” sets in.

Millions voiced their frustration during the Arab Spring. From Tahrir square to the streets of Tunis, a huge emerging middle class showed that it has a tremendous capacity to mobilize people. It demands governments that are open and transparent, as well as more and better services. How can governments answer these demands? How can they go about redistributing the fruits of growth?

A new policy agenda is needed: one that focuses not only on growth but also on openness, fairness and inclusion. Social cohesion needs to be at the centre of policy making. Failing this, we may (re)enter a vicious circle where inequalities create a sense of injustice, which in turn can lead to (mass) protest and sometimes violence. As a result, social peace and stability, as well as long-term growth, may be jeopardized.

How can governments foster social cohesion? Perspectives on Global Development: Social Cohesion in a Shifting World from the OECD Development Centre, answers this. With this latest report, the Development Centre again proves that it is engaged with the world we live in, whether discussing tax revenues or the merits of football as a factor of social cohesion: having a sense of community can make a difference. That, along with equality of opportunities is what social cohesion is all about.

The report first shows how the world has undergone a shift of historical significance over the past decade, with the centre of economic gravity moving towards the East and South. The figures speak for themselves: in 2000, OECD countries represented around 60% of global GDP but by 2010 this was down to 51%, and it will be only 43% by 2030. In fast-growing economies, per capita growth rate was more than double that of high-income OECD countries over the last decade.

It is precisely this shifting wealth that opens a window of opportunity for development and social cohesion. In fast-growing economies, fiscal revenues rose from 20% of GDP on average in 2000 to 27% in 2008. These countries now have the (fiscal) resources to finance social policies that can make the difference – or, can they?

This report argues that public policies can make a difference. OECD countries with initially high income inequalities manage to redistribute income through taxes and transfers. The challenge is to leave no one behind. A cohesive society reduces inequality between groups and ensures that all citizens – the poor, the middle-earners, and the rich – are socially included.

Over the last decade, hundreds of millions of people were lifted out of poverty. This report argues that the emerging middle class should not be ignored either. Today, nearly 1 billion out of the 2 billion people living on 10 to 100 dollars a day in the world – the global middle class – live in fast-growing countries. This number is projected to exceed 3 billion in 2030.

The emerging middle class is a critical economic and social actor because of its potential as an engine of growth, particularly in the largest developing countries such as China and India. Its contribution to social cohesion can be high, and its expectations are sharply rising. What is needed is a social contract between citizens and the state, which entails more and better services in exchange for paying taxes. This would foster a virtuous circle that boosts social cohesion as well as growth. Citizens are more willing to pay taxes in societies where they feel a sense of belonging. Fiscal policy is thus a good place to start.

As the report highlights, fiscal, social and employment policies should go hand in hand. With recent innovations in social protection, the poorest are covered by social assistance and the wealthy by either contribution-based or private alternatives. Yet, a considerable number of (informal) middle-class workers are stuck in the uncomfortable “missing middle” of coverage. More comprehensive social protection systems should protect all sections of the population.

Stronger labour market institutions are also needed. They should aim to create more “good” jobs and reduce the duality in labour markets – between standard and non-standard contracts or between formal and informal workers. This will be critical in reducing inequalities and fostering social cohesion.

A series of cross-cutting issues have to be addressed coherently as well, including education, gender equality, food policy, the integration of immigrants, and institutions.

As Albert Einstein once said, “Reality is merely an illusion, although a very persistent one”. Ignoring people’s desires and the reality in which they live is perilous. Technocratically good policies that do that just won’t work and giving space to dissenting voices is essential to the creation of a sustainable, socially cohesive society.

Social cohesion is a means for development as well as an end in itself. What if social cohesion were the 21^st century’s holy grail? A holy grail that can only be attained with some long-term vision and commitment – and a smile. Failing that, there might be rough times ahead.

Useful links

Social cohesion on Wikiprogress

OECD Development Centre

2012 年全球发展前景：转变中世界的社会凝聚力

The week that was and the week ahead – who’s saying what about progress

Would you believe that it’s only the 5^th day of this month and already we feel it’s time to give you a media review?! We’ll be brief, but be warned- these are 5 days of progress you wouldn’t want to miss!

Gauging the Pain of the Middle Class (New York Times 02.04.2011)

This NYT article will also be a highlight of our month. A great piece on what the author deems the ‘Toli Index’- which shows the median number of hours an earner needs to work in order to be able to afford to live in a decent area that has access to a school of at least average quality.

Of the 1%, by the 1%, for the 1% (Vanity Fair 01.04.2011)

Joe Stiglitz amazes again with his wonderful way of articulating inequality statistics. This is an article not to be missed, not only because it is exquisitely written and captivating in true Stiglitz style, but because it is something that each and everyone of us can relate to.

Overtaking (The Economist 01.04.2011)

The US and China must have been highlighted in almost every single edition of the Economist for at least the last 8 years. This article shows how wonderfully diverse our friends at the Economist are and how they can shed light on things we would never even consider thinking about. Competitive lawn-mowing… really?!

Goodbye aid and MDGs, hello global goods and wellbeing (The Guardian 29.03.2011)

Alright, so this one doesn’t quite make the deadline of 5 days- but if you read it I’m sure you’ll understand why I slipped it in. Posted at the end of last month, this blog looks at the role wellbeing plays in the future of development.

A quick look to the week ahead- tomorrow the Institute for Economics and Peace (IEP) will launch the first ever United States Peace Index (USPI) that will rank 50 states according to their peacefulness. The index aims to identify the key drivers of peace by state and will analyse the economic benefits of peace. IEP President Camilla Schippa will blog in detail about this index at the end of the week… stay tuned! 

Philippa Lysaght 

Media review

Recent highlights from the Wikiprogress Community Portal

What a month it has been! It seems every time I open a newspaper, click on blog post or turn on the radio someone is talking about the importance of measuring wellbeing. To my delight, my top 3 favourite news sources: The Economist, The New York Times and The Guardian, have all been a part of the March Media Madness. Here are a few highlights I’d like to share with you.

On China

China announced earlier in the month that ‘happiness’ will be an element incorporated in their growth strategy. Many different news sources picked up on this and we have created a Special Media Review on China’s Move the Measure Happiness. A few of the highlights are listed below:

Don't worry, be happy (The Economist 17.03.2011)

On Japan

All eyes have been on Japan since the devastating earthquake and subsequent tsunami hit on the 11^th of March. The economic implications of this have had a fair but of negative media time, but here are a few articles that highlight the importance of measuring and appreciating non-economic indicators of human wellbeing.

Why no looting in Japan? (Aidwatch 15.03.2011)

The Impact of Disaster (NewsWeek 20.03.2011)

On Happiness

There have been loads of news items on the UK’s bid to measure happiness since Cameron’s announcement back in November last year. And a fair bit of coverage on happiness in general. Here are a few great articles on the importance’s of measuring happiness.

Stimulating Happiness (New York Times 14.03.2011)

10 steps to happiness (The Guardian 12.03.2011)

And last, but not least, our dear friend Hans Rosling gives a TED talk on the Magic Washing Machine. To see more news items, see the Wikiprogress Community Portal – updated daily with news and blog items from around the world.

Philippa Lysaght