The impact of the Brazilian rural social insurance reform on family composition: an analysis of the structure of homes after the increase in the income of the elderly

Abstract

This study aimed to assess the effect of an exogenous change in income, due to the 1992’reform of Brazilian social insurance for rural workers, on the structure of rural homes in Brazil. We assessed the impact of the increase in the income of the elderly on the composition of homes, regarding possible changes in family arrangements. In particular, this study considered household arrangement (or household composition) as an endogenous variable, contrasting to the existing literature that considers it an exogenous variable to the economic environment of the household. The objectives of the study were: to estimate differences in family arrangement between families with an elderly member eligible to receive the reform benefits, and families without an elderly member, before (1989) and after (1998) the reform; to assess how the differences in family arrangements can be explained by the changes caused by the rural social insurance reform; and to assess if the effects of the presence of a member eligible for retirement in family arrangements vary as a function of the gender of the beneficiary. The importance of the study is that its results might help understand the primary and secondary impacts of a policy that aims to increase the income of a growing segment of the Brazilian population: the elderly. According to the results, it is possible to state a statistically significant impact on household arrangements due to the 1992 rural social insurance reform. This is showed by the differences in family composition between the groups that are eligible and non-eligible for benefits of the reform. Additionally, when the most predominant type of family composition is considered, this impact is associated to the gender of the eligible member, that is, when the eligible individual is a female, the household composition tends to be more complex than for non-eligible males or females.