Widening Social Security Coverage. Evaluating Income Distribution Effects of Argentina´s PROG.R.ES.AR

DI GIOVAMBATTISTA, ANA PAULA; PANIGO, DEMIAN

Coyuntura Económica

FEDESARROLLO - Centro de Investigación Económica y Social

Año: 2014 vol. 44

0120-3576

In the last decade, Latin American countries experienced a large increase in their social security coverage rates. Reinforcing this regional dynamics, Argentina introduced in 2014 a new set of social rights through the youth oriented program named PROG.R.ES.AR, aimed to: 1) reduce income inequality, by providing financial support to low-income young people; 2) complement and improve capacity-building strategies of human capital policies; and 3) stimulate aggregate demand, with the injection of up to AR$ 10,600 million annually in terms of social investment. In order to make the first prospective evaluation of this program, the main contribution of this paper is to show their expected "first round" distributional impact, using data from the EPH-INDEC (Q2-2013) and applying the methodology popularized by Bourguignon and Spadaro (2006). Our simulations show that it could potentially reduce inequality in up to 14.3% and 32% for the whole population and the youth, respectively.