Old Age Pensions,Poverty and Dignity

Abstract

AB STRACT The article refers to studies indicating that universal old age pension programmes alone or in combination with earnings-related schemes are conducive to poverty alleviation and less income inequality. Universalism matters, but few countries in the world have introduced universal old age pension programmes. The article does not research this apparent paradox, but asks the empirical question of whether poverty was a prime concern and reflected in arguments used in favour of universal old age pension when such programmes were introduced historically. What were the pro-arguments? The article looks at the arguments for establishing universal old age pension in three selected countries, all belonging to the group of pioneer countries in this respect: Canada, Mauritius and Norway, which all introduced universal pensions in the 1950s. Historical arguments for universal pension systems in these countries are presented and compared. The ambition to reduce poverty was an important motivation in two of the countries, but the main consideration cutting across all three countries was the moral aversion to means-testing and the desire to achieve fairness and respect to human dignity. Another argument found in all three countries was the pragmatic one that a universal scheme would lead to a reduction of the administrative cost of old age provision compared with a system based on means testing.