A Role for Universal Pension? Simulating Universal Pensions in Ecuador, Ghana, Tanzania and South Africa

We use four novel, cross-country comparable tax-benefit microsimulation models for Ecuador, Ghana, Tanzania and South Africa to analyse ex ante the expansion of a universal old-age pension in a static setting. Universal pensions would significantly reduce poverty and inequality in settings where no means-tested old-age pensions exist (such as in Ghana and Tanzania). If means-tested old-age pensions exist and shall be maintained, universal pensions as a top up scheme only make a difference for the income distribution if the existing schemes do not reach the entire vulnerable population such as in Ecuador. Costs for the proposed schemes are substantial.