With Age Comes Hardship in Latin America

By Marcela Sanchez
Special to washingtonpost.com
Friday, July 25, 2008; 12:00 AM

WASHINGTON -- My mother just wrapped up her annual visit. Usually, she would take over our house and our lives. But this time it was different. Two weeks in, she looked at me, pointed in my direction and said: "I hope you never get old."

This past year has not been easy for my mother -- one of the most energetic persons I've ever known. She has lost strength in her hands and often her legs don't do what she wants them to do. Opening a water bottle or using stairs and escalators are now nearly impossible without assistance. She is often depressed.

Normally I wouldn't be sharing this. But the day after she returned home to Colombia, I read a story in The Washington Post that jumped at me for its obvious irony: "Older Americans May Be Happier Than Younger Ones." The story cited several studies suggesting a "stream of evidence" that a positive correlation exists between age and happiness in the United States.

For Latin Americans, the correlation is flipped. According to Carol Graham, a senior fellow at the Brookings Institution who has specialized in the economics of happiness, as people in Latin America age, the more unhappy they are.

Similar correlations are found with cumulative wealth. Older people in rich countries tend to be better off than younger generations. "That is exactly reversed in Latin America," says Leonardo Gasparini, director of the Center for the Study of Distribution, Labor and Social Affairs (CEDLAS) at the Universidad Nacional de La Plata, Argentina.

In most Latin American countries, the poverty rate among the elderly is higher than the national average -- up to 20 percent higher in Mexico, for instance. The exceptions are Argentina, Brazil, Chile and Uruguay, thanks to pension systems that cover on average 66 percent of the elderly population. In the rest of the region, that average drops substantially -- to 14 percent.

My mom is among the lucky few. As a former public radio employee, she has a small pension that provides her with a steady income. But when it comes to the elderly, access to good quality health care is equally essential.

There the contrast with high-income countries is also significant. In 2006, 98.5 percent of the population over 65 in the United States had some health insurance coverage, according to the U.S. Census. In Nicaragua, only 7 percent of people over 60 had access to health insurance. In El Salvador it was 14 percent and in Guatemala, 21 percent, according to a socioeconomic database developed by CEDLAS and the World Bank.

Most disturbing is the fact that conditions for the elderly in the region are not likely to improve. In Latin America, less than half of the work force is employed in the formal sector. This means that for the majority, employed as they are in day labor jobs, pensions or health insurance are simply unimaginable. Their quality of life in old age depends on a combination of factors, from their ability to continue to work to the wealth of their relatives or their access to public charity. Even formal- sector employment does not guarantee coverage by a social security system. In fact, through a lack of compliance and by contracting out more and more work, the loophole to avoid contributing to such systems has been growing in recent years, Gasparini says.

These trends are all the more worrisome considering that Latin America is aging at a faster pace than the developed world. Last year people 60 and over made up 9.1 percent of the population in the region. By 2050, that number will climb to 25 percent, according to the Economic Commission for Latin America and the Caribbean.

Jose Miguel Guzman, chief of population and development at the United Nations Population Fund, notes that Latin American governments have not come to terms with this challenge. To date, he says, "in most of the countries in the region there has not been a process of adapting public policies and institutions to this new demographic reality."

One exception has been Brazil, which currently funds a pension system that covers 85 percent of the elderly in rural areas. While it requires a significant government investment upfront, Guzman says the elderly tend to be good "redistributors of resources" to younger generations. In strict financial terms, investing in the elderly may seem counterintuitive, but Brazil is finding that it may do more than help some to stop dreading old age.

Marcela Sanchez's e-mail address is desdewash@washpost.com.

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