Demographic Transition and Intergenerational Transfers in Peru

Abstract

This chapter explores intergenerational transfers in the context of rapid demographic change in Peru. The case study was chosen to illustrate how transfer payments from remittances, public payments, and pensions are presently not enough to support the growing income needs of the people, and particularly of older persons. Peruvian society possesses a strong tradition of solidarity within the extended family, and this basic social unit is resilient to sharp economic and sociopolitical shocks. For that reason, small children and older persons who need special care and income support are often assisted by family members. This chapter shows that international out-migration is accelerating the aging of the population because younger people are leaving the country in large numbers. Aging is also a natural outcome of the drastic decline in fertility rates, particularly in urban areas, and increased longevity. One would hope that remittances from abroad would help support relatives back at home. Evidence, however, seems to indicate that the percent of the population that accesses international transfer payments is still small. Another option for income security in old age would be access to pensions. However, as will be seen, neither public nor private pensions are paid to a majority of persons over 65, who represent more than six percent of the population.