Social Assistance and Welfare in India: Propensity Score Matching Estimation of the Impact of Indira Gandhi National Old Age Pension Scheme on Household Consumption

Abstract

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Women, especially in old age, are vulnerable to poverty and poor health. The social assistance, such as women’s old-age pension, provided by the government helps households with elderly women improve household well-being by increasing household consumption expenditure and reducing household poverty. This paper analyses the effects of the Indira Gandhi National Old Age Pension Scheme (IGNOAPS), on the well-being of households with elderly women in India, using the 2011-12 India Human Development Survey-II data and applying the non-parametric propensity score matching (PSM) method. The effect of pension amount received under IGNOAPS on household monthly per capita consumption expenditure is estimated. The IGNOAPS increases household monthly per capita consumption expenditure on food items, education, and health by 8%, and reduces household poverty. As the programme involves unconditional cash transfers to the targeted elderly women, the entire household derives the larger benefits in terms of increased consumption. Thus, the IGNOAPS is a welfare-improving and poverty-reducing social assistance programme.

Keywords: Elderly Women, Old-Age Pension, IGNOAPS, Programme Participation, Consumption Expenditure, Propensity Score Matching Estimation

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