Poverty and Social Programs in Chile

This article was downloaded by: [Loyola University] On: 4 September 2009 Access details: Access Details: [subscription number 907142404] Publisher Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Journal of Poverty Publication details, including instructions for authors and subscription information: http://www.informaworld.com/smpp/title~content=t792306947 Poverty and Social Programs in Chile Mauricio Olavarria-Gambi a a Institute of Public Affairs, University of Chile, Santiago Centro, Chile Online Publication Date: 01 April 2009 To cite this Article Olavarria-Gambi, Mauricio(2009)'Poverty and Social Programs in Chile',Journal of Poverty,13:2,99 — 129 To link to this Article: DOI: 10.1080/10875540902841606 URL: http://dx.doi.org/10.1080/10875540902841606 PLEASE SCROLL DOWN FOR ARTICLE Full terms and conditions of use: http://www.informaworld.com/terms-and-conditions-of-access.pdf This article may be used for research, teaching and private study purposes. 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Olavarria-Gambi and Social Programs in Chile MAURICIO OLAVARRIA-GAMBI Downloaded By: [Loyola University] At: 18:30 4 September 2009 Institute of Public Affa irs, University of Chile, Sa ntia go Centro, Chile This a rticle presents a n empirica l cha ra cteriza tion of poverty in Chile during the period 1987–2006. This cha ra cteriza tion refers to both persona l cha ra cteristics a nd a ccess to ma in socia l services. Such cha ra cteriza tion will help schola rs a nd policyma kers to understa nd the strengths of the Chilea n poverty reduction process a s well a s the ma in cha llenges it fa ces from now to the future. KEYWORDS chile, poverty, socia l policy OVERVIEW Chile is often cited as a successful case of poverty reduction and a country with social development compared to that of industrialized nations (World Bank 2006). Data from an income measure show that poverty incidence was reduced from 45.1 percent in 1987 to 13.7 percent in 2006, as shown in Table 1. Other poverty measurements such as the Foster-Greer-Thorbecke family of indexes about unsatisfied basic needs reported a sharp fall in poverty as well (Carrasco, et al., 1997; Contreras & Larrañaga, 1998; Ferreira & Lichfield, 1998; Torche 1999). Poverty was reduced in terms of both an average economic growth record of seven percent from 1984 to 1998 and a long tradition of public policy interventions on social affairs (Olavarrìa-Gambi, 2005). Most studies attribute this reduction to economic growth almost exclusively (CEPAL, 2000; Contreras, 2000; Contreras & Larrañaga, 1998; Giovagnoli, et al., 2005; Larrañaga, 1994; World Bank 2001) or mainly (Meller, 2000). Olavarria-Gambi (2005) has challenged this conclusion arguing that economic growth has provided an opportunity, but those who have been able to take that opportunity have been the ones who have access to education, health care services, and social protection programs; in other words, those Address correspondence to Mauricio Olavarria-Gambi, Instituto de Asuntos Publicos, Universidad de Chile, Santa Lucía 240, Santiago Centro, Chile. E-mail: molavarr@uchile.cl 99 M. Ola va rria -Ga mbi 100 TABLE 1 Chile’s Poverty Trends, 1987–2003 Indigents Poor Non Indigent Total Poor 1987 1990 1992 1994 1996 1998 2000 2003 2006 17.4 27.7 45.1 12.9 25.7 38.6 8.8 23.8 32.6 7.6 20.0 27.5 5.7 17.5 23.2 5.6 16.1 21.7 5.7 14.9 20.6 4.7 14.1 18.8 3.2 10.5 13.7 Downloaded By: [Loyola University] At: 18:30 4 September 2009 Source: CASEN. reached by social programs. In this context, this article is an analysis of the Chilean experience of the effect of social policy interventions on the likelihood of leaving poverty. This is an area where the government needs to focus and stress efforts. This article will analyze what type of programs have been designed to address those deficits and what the early evidence is telling about the effectiveness of those efforts and will illustrate what is behind—in terms of social policy interventions—an impressive record of poverty reduction. This type of analysis also provides lessons, in terms of both strengths and difficulties, which may be useful for those who are involved in poverty alleviating efforts. Chile’s tradition of social policy implementation rose in the first half of the 19 th century with the first efforts for establishing the educational system. It improved by early 20th century with the government’s involvement in the delivery of health care services and the creation of the social security system in 1924. As a consequence of this long social policy tradition, by 2006 Chile exhibited an average schooling of 10.14 years among people 15 years of age and older, while the Latin American average by the early 2000s was 5.8 years among people 25 years of age and older (De Ferranti & Ody, 2006), and has one of the best indexes in Latin America on infant and child mortality and literacy rate. Chile jumped from the eighth to the second position in Latin America between 1950 and 1998 on life expectancy (OPS, 1994; PAHO, 1998). The main data source used in this study is the National Socio-Economic Characterization Survey (CASEN). Taking nine of those surveys available, this article analyzes how personal characteristics relate to the probability of being poor, and how the likelihood of being poor varies according to different schooling levels as well as the likelihood of people from different socioeconomic levels to access social services. Analyses control for background characteristics such as gender, age, marital status, and area of residence. Similarly, the analysis of some of the main social programs focuses on the likelihood of the poor and non-poor to be covered for the pension system and health care programs—either public or private ones. In addition, the work presents those probabilities from 1987 to 2006. Following this overview, a policy backdrop is presented, and then the article turns to the presentation of the main results of the quantitative analysis. Finally, relevant conclusions are discussed. Data and methodology used in the empirical analysis are briefly explained in Appendix 1. Poverty a nd Socia l Progra ms in Chile 101 Downloaded By: [Loyola University] At: 18:30 4 September 2009 POLICY BACKDROP Olavarría-Gambi (2005) has argued that Chile’s long tradition of social policy interventions has allowed the country to exhibit a relatively healthy and educated population, which, in turn, make it possible for extended segments of people to take the opportunities created by the decade and a half (1984–1998) of fast economic growth and exit poverty. At the opposite side, those not reached by social policy stayed relatively unhealthy, less educated and remained in poverty, even during the fast-growth era. Following a long tradition of government intervention in social affairs starting in the 19th century, major social programs have been designed and implemented, and since 1990 have been oriented to make the poverty-overcoming process a sustainable one. As a result of that long social policy tradition, available data show that by the 1980s, Chile already exhibited one of the best records in this field in Latin America (CEPAL, 1986). Chile’s life expectancy was the fourth highest in the region (70.7 years), after Costa Rica’s (73.8 years), Uruguay’s (71 years) and Panama’s (70.8 years). Chile’s infant mortality was the second lowest in the region (23.7 per thousand) after that of Costa Rica (19.2 per thousand); Chile and Costa Rica were the two countries showing the lowest mortality among children under five years old, registering average annual rates of 20.2 and 27.9 per thousand, respectively. Similarly, by 1980, Chile had attained complete coverage of primary education and its coverage of secondary education was the second highest in Latin America. By 1960, Chile already exhibited the highest percentage of economically active population in the region completing between 10 and 12 years of education. By the decade beginning in 2000 those social indicators were even better. Considering that investments in human capital take a long time to mature, there is undoubtedly an effect of those investments on the comparatively good social development indicators shown by Chile relative to those of the Latin American region. In addition, available evidence suggests that poverty should have increased by the early 1980s as a consequence of recessions caused by the debt crisis of the early 1980s. GDP fell 14.1 and 0.7 percent in 1982 and 1983, respectively, unemployment skyrocketed to 20 percent in 1982 and real wages fell almost 11 percent on average in 1983. By 1987, when 45.1 percent of the population was poor, Chile had been growing at an average rate of 5.25 percent for four consecutive years, and unemployment had fallen to 9.6 percent. Poverty fell to 21.7 percent in 1998, after a period of fast growth, decreased again to 20.6 percent in 2000 in a context of a GDP fall of 1.1 percent in 1999, and it continued reducing to 13.7 percent in 2006, in the context of a slowdown economy (1998–2006). The unemployment rate that was 6.5 percent by mid 1998, increased to 11.5 percent by mid 1999, and kept between 8 and 10 percent from 1999 to the end of 2005 (INE 2008). Downloaded By: [Loyola University] At: 18:30 4 September 2009 102 M. Ola va rria -Ga mbi Despite an economic slowdown and an unemployment increase, poverty did not rise because of social programs implemented by social programs oriented to counteract the effects of the economic crisis of the late 1990s and its slow recovery in the 2000s. The analysis of Chile’s poverty trends and social indicators suggest that Chile’s long tradition of social policy has played a highly important role in the reduction of poverty, not only providing the basis (in terms of human capital expansion in education and health prior to fast growth era) from which growth could act, but also continuing the poverty reduction pattern despite the economic difficulties faced by the country. But this analysis also suggests that those unable to overcome poverty were those that these social policy interventions could not reach. Major social programs have been implemented since the 1990s seeking to reach them. Whether those social programs have been effective in reaching them, as well as whether the results of these programs are positive may shed light on the main challenges that the Chilean-poverty-overcoming process faces from now to the future. The following sections deal with that. POVERTY TRENDS BETWEEN 1987–2006 As explained before, this work tries to focus on the personal characteristics of the poor. Thus, the analysis of housing is beyond its scope. Similarly, the analysis of the relation between unemployment and poverty is not undertaken because it has been already well established (Anriquez, et al.,1998; Castro, 1994; Contreras & Larrañaga, 1998; Torche, 1999). Consequently, this section concentrates on the analysis of education levels; health status of different socio-economic strata; types of employment; personal characteristics such as age, gender, and marital status; and whether residence is in urban or rural areas. These characteristics have been selected because data on them have been consistently included in the eight CASEN surveys available. The poor have been divided in two categories: the indigents, being the poorest, and the poor non-indigents. To complete the panorama about lowincome people, an additional category has been created, namely the almost poor. The indigent are those whose income is lower than a basic basket of food (BBF), the income of the poor non-indigent lies between one and two BBF, that of the poor is lower than two BBF, and the almost poor are those whose income is equal or higher than two BBF but lower than three BBF. A basic basket of food is a measure that identifies the minimum income needed by a person to satisfy his or her nutritional needs. It is constructed using the minimum-required consumption of calories and proteins according to the World Health Organization standards, the population consumption habits, and market prices. An explanation about the data and methodology of the empirical analysis has been included in Appendix 1. Downloaded By: [Loyola University] At: 18:30 4 September 2009 Poverty a nd Socia l Progra ms in Chile 103 Statistical analysis shows that the poor–indigents and poor non-indigents appear mainly to be women, urban residents, and people younger than 40 years of age with less than eight years of schooling (see Tables 2 and 3). Correspondingly, females and people younger than 40 years of age are less likely to belong to a medium or high income stratum, but the opposite happens with rural residents and people who are single, separated, divorced, or widowed. Furthermore, people who completed secondary education or higher are more likely to belong to the medium or high-income stratum. The multinomial logit model shows that the likelihood of being poor falls along the period 1987–2006 for each controlled background characteristic, which is consistent with the diminishing poverty trend. Controlling for gender, area of residence, age, schooling level, and marital status, the likelihood of a woman to be poor is between one or two percent higher than that of men during the period, all else equal, but both face practically the same probability to be almost poor (Table 2). Furthermore, urban residents are more likely to be either poor or almost poor than rural inhabitants (Table 2). However, Table 2 also shows that the likelihood of being poor rose slightly in 2000, fell again in 2003 and 2006, and the likelihood of being almost poor rose by the year 2000 and 2003 but fell by 2006. This is coincident with the period of an economic slowdown affecting Chile and it would TABLE 2 Predicted Probability of Being Either Poor or Almost Poor Sorted by Gender and Area of Residence, 1987–2006 Male Female Urban Rural Almost Male Poor Female Urban Rural Poor 1987 1990 1992 1994 0.4159 0.4253 0.4401 0.3728 0.1852 0.1790 0.1782 0.1874 0.3454 0.3631 0.3902 0.2688 0.1904 0.1900 0.1958 0.1695 0.3060 0.3274 0.3464 0.2645 0.1909 0.1917 0.1992 0.1731 0.2951 0.3155 0.3303 0.2679 0.1900 0.1946 0.1960 0.1841 1996 1998 0.2386 0.2101 0.2545 0.2295 0.2625 0.2427 0.2093 0. 1747 0.1773 0.1703 0.1817 0.1756 0.1867 0.1849 0.1591 0.1453 2000 2003 2006 0.2500 0.2643 0.2738 0.2343 0.1812 0.1848 0.1933 0.1683 0.2236 0.2414 0.2577 0.1948 0.2195 0.2283 0.1964 0.2666 0.1460 0.1629 0.1763 0.1221 0.1928 0.2049 0.1843 0.2207 Source: Author’s calculation based on CASEN surveys. Note: See appendix 2 for results of the multinomial logit regression. TABLE 3 Predicted Probability of Being Poor According to Selected Levels of Schooling, Chile 1987–2003 Schooling Levels 4 8 12 17 years years years years 1987 1990 1992 1994 1996 1998 2000 2003 2006 0.5013 0.3058 0.1499 0.0491 0.4335 0.2858 0.1641 0.0702 0.3812 0.2463 0.1400 0.0603 0.3576 0.2253 0.1256 0.0533 0.3171 0.1859 0.0953 0.0364 0.2929 0.1756 0.0939 0.0385 0.3179 0.2040 0.1179 0.0532 0.3209 0.1989 0.1094 0.0459 0.3210 0.2100 0.1252 0.0596 Source: Author’s calculation based on CASEN surveys. Note: See appendix 3 for results of the multinomial logit regression. Downloaded By: [Loyola University] At: 18:30 4 September 2009 104 M. Ola va rria -Ga mbi suggest that the main negative effect of the period would have been concentrated in the lower-middle class people. Education is negatively associated with poverty. Even though the likelihood of being poor decreased for all educational levels during the period due to the poverty reduction trend, those with lower education consistently exhibit a higher probability of being poor. For instance, among people 24 years of age and older and controlling for gender, area of residence, age, and marital status, somebody having four years of schooling in 1987 faced a 50 percent probability of being poor, while that probability for those who had achieved 8 or 12 years of completed education was 30 and 15 percent respectively (see Table 2). In 1998, the probability of being poor for the same schooling levels had changed to 29, 17, and 9 percent respectively and by 2006 that likelihood was 32, 20, and 12 respectively (Table 3). In this general diminishing poverty trend, the fastest path is that of those who accumulated higher human capitalthrough education. The analysis shows that the percentage change in the probability of being poor due to one more year of schooling relates to the stage of the educational process where that additional year is achieved. For instance, in 1987, when poverty incidence was 45.1 percent, the percentage change in the probability of being poor for increasing educational achievements from 3 to 4 years was 0.085, 7 to 8 years was -0.135 and 11 to 12 years was -0.18. In 1998, when poverty incidence was 21.7 percent, that percentage change for the same schooling levels was -0.10, -0.13 and -0.15 respectively. Those changes were respectively -0.08, -0.108 and -0.127 in 2003, when poverty incidence was 13.7 percent in 2006. Results of the predicted probability analysis shows a slight decrease in 2006 respect to those of the year 2000, except for the category of four years of schooling. That might suggest that the recuperation process—after an economic crisis—is much harder for those with the lowest human capital. These findings additionally open questions that later research should address. Why do people who have higher education fall into or remain in poverty?, Why are people with low schooling, or even no education, not poor?, Is there anything else besides education that significantly prevents people from overcoming poverty? Analyses are made on characteristics registered on surveys but there could be other factors on which we lack data, such as propensity for effort and work, social relation networks, fortuitous events, all of which can influence someone’s probability of being poor. Since there is not much evidence available in Chile on the effect of these unobserved variables, that could be an important contribution of later researches. Controlling for the same variables already mentioned, statistical analysis also shows that people younger than 40 years of age are more likely to be poor. This result is consistent with Torche’s (1999) as well as Contreras’s and Larrañaga’s (1998) findings. Torche explains this in terms of the value of experience. Contreras and Larrañaga argue that ages 20 to 39 are associated Downloaded By: [Loyola University] At: 18:30 4 September 2009 Poverty a nd Socia l Progra ms in Chile 105 to transient poverty due to the fact that those ages correspond to the early stages of a household. On the other hand, reported findings contradict a common view that poverty is more extended in rural areas. A reason for this finding would be that the lack of a better future and the seeking of better economic opportunities would stimulate the migration to cities, which would result in a concentration of the poor in urban areas. An alternative explanation would suggest that in rural areas there would be a greater number of working people per household—oriented either to earning income or self consumption—which would result in a lower likelihood of poverty in the country side. So far the analysis has concentrated on whether some personal characteristics are associated to poverty. Now the focus turns to the analysis of the likelihood of low-income people to be healthy, or the likelihood of the sick to receive medical help, and to be self employed or low qualification worker. The analysis of the health conditions faced by low-income people reveals that they are likely to be healthy. 1 However, when sick they are less likely to receive medical help. This finding suggests, on the one hand, that the low quality health care service that the poor receive, along with the long waiting list they have to go through, discourage them from seeking medical help when sick or injured. On the other hand, it would also suggests that, since they have a higher probability of lacking social security coverage, the opportunity cost of getting such services, and eventually taking a sick leave, is too high for the poor who cannot afford to stop working. Labor is the most important way in which people get income and exit poverty (Larrañaga, 1997) and in order to get into the labor market people need to be healthy enough. That is why being healthy is positively correlated to income (Akin et al, 1985). These findings suggest that keeping healthy is the only asset the poor can exhibit, but that asset is in jeopardy because they do not get the same opportunities to receive medical help when sick as people from higher economic strata do. Statistical analysis also reveals that people younger than 40 years of age are likely to be healthy too but the opposite occurs with women and people older than 65 years of age. Rural residents and people older than 65 years of age are less likely to get medical care when sick. Children from low income families are more likely to be undernourished. The fact of being a low-income person—indigent, poor, non-indigent, or almost poor—does not seem to be associated with the fact of being a self employed worker. However, from the educational attainment point of view, those who have between one and seven years of schooling are more likely to become self-employed workers. 1 Variables controlled for are: socioeconomic stratum (indigent, poor, non-indigent, and almost poor), gender, area of residence, age, schooling and marital status. 106 M. Ola va rria -Ga mbi Downloaded By: [Loyola University] At: 18:30 4 September 2009 Being a self employed worker is not associated with poverty or low income because being self employed is a reality among the poor, and they are not the only ones belonging to this category, which includes several types of labor activities such as various types of commerce, salesmen, professional consulting, craftsmen, gardeners, and also blue collar workers who work occasionally. “Unskilled worker” seems to be a better category to describe the working poor. The poor—indigents and poor non-indigents—are likely to belong to this category. Correspondingly, low educational attainments exhibit a positive association with being an unskilled worker. Similarly, people younger than 40 years of age, women, and rural inhabitants are more likely to get non-specialized jobs. SOCIAL POLICY AND THE INCIDENCE OF POVERTY Although social programs themselves are not intended to reduce poverty directly, they have an impact on that since, on the one hand, poverty is measured through income and, on the other, an important part of those programs are the government money subsidies going to people. Thus, an interesting question is how many people are left to be counted as poor because of these subsidies. A simple methodology to address that question is to compare the incidence of poverty with and without those subsidies. Table 4 reports the results. Government money subsidies considered are the following: the unique family subsidy (SUF), 2 the Assistance Pension (PASIS), 3 the family subsidy4 and the subsidy for unemployed workers. 5 These subsidies directly transfer money to people. All four subsidies are targeted to low-income people. However, the family subsidy, though progressive, does not exclusively focus on the poor, since workers having children and a monthly salary lower than 734 US dollars—as of December 2006—are entitled to this subsidy. Results from Table 1 show that on average, 1.5 percent of the population left to be deemed poor due to money subsidies in each of the year in which 2 The unique family subsidy (subsidio único familiar—SUF) is a subsidy delivered to parents of children, pregnant women, and mentally disabled people lacking protection within the social security system. To qualify for this subsidy, people have to fulfill several requirements showing that they are in a state of poverty. 3 People entitled to the minimum old age and disability pension (pensiones asistenciales—PASIS) are those older than 65 years of age and the handicapped over than 18 years of age without protection within the social security system. 4 The family subsidy (asignación familiar) is a subsidy entitled to every worker with dependants earning less than the equivalent to US 574 dollars monthly. The subsidy is progressive, so workers earning the lowest salaries are entitled to a higher subsidy. 5 Workers who have been unemployed for at least three months are entitled to this subsidy. It is paid every four months, its amount is decreasing and it can not be received for more than 360 continued days. Poverty a nd Socia l Progra ms in Chile 107 TABLE 4 Variation in Percentage of Poor People Due to Money Subsidies, 1987–2006 Indigents Poor non-indigents Total poverty Almost poor Medium-high income Total non-poor -2.39% -1.32% -1.23% -1.14% -1.44% -1.50% -1.09% -1.52% -1.31% +0.73% +0.25% +0.003% -0.12% -0.33% -0.44% -0.65% -0.46% -0.81% -1.66% -1.07% -1.22% -1.26% -1.77% -1.94% -1.74% -1.99% -2.12% +0.97% +0.52% +0.55% +0.53% +0.35% +0.69% +0.25% +0.49% -1.40% +0.69% +0.55% +0.68% +0.74% +1.43% +1.25% +1.49% +1.50% +3.52% +1.66% +1.07% +1.22% +1.26% +1.77% +1.94% +1.74% +1.99% +5.11% 1987 1990 1992 1994 1996 1998 2000 2003 2006 Downloaded By: [Loyola University] At: 18:30 4 September 2009 Source: Author’s calculations based on CASEN 1987 to 2006. the CASEN survey was administered. The greatest impact of these subsidies on the incidence of indigence is in 1987, but the greatest impact on total poverty is in 2006. This year the percentage of almost poor also fell and the category of medium-high income shows the highest increase thanks to these money subsidies. This may be attributed to a greater efficiency of the targeting system but also to the increase in the amount of the subsidies and the people covered. The government has shown that the aggregate spending on money subsidies has been targeted on the poor. According to the government, the 40 percent lowest income people appropriated between 55.9 and 73.5 percent of that spending from 1987 to 2006 (see Table 5). Both SUF and PASIS have been the money subsidy showing the best capacity to reach low income people during the period 1987–2006. Statistical analysis shows that they are the ones most likely to receive these subsidies. On the other hand, the family subsidy has not been so effective in reaching the poorest: indigent people are unlikely to get it and the almost poor are generally more likely to receive it. And there is no consistent evidence about the subsidy for unemployed workers since statistical analysis generally delivers insignificant coefficients. TABLE 5 Distribution of Money Subsidies Among Households Classified by Quintiles of Income, 1987–2006 (%) Quintile of income 1987 1990 1992 1994 1996 1998 2000 2003 2006 I II III IV V Total 33.6 22.3 17.9 14.9 11.3 100.0 33.7 23.9 18.4 13.9 10.1 100.0 36.4 26.2 17.9 12.0 7.4 100.0 38.7 26.2 17.3 12.1 5.6 100.0 36.1 27.8 20.6 11.5 4.0 100.0 46.3 26.4 16.0 8.4 2.9 100.0 45.4 27.7 15.8 8.3 2.8 100.0 46.7 25.6 15.8 8.8 3.1 100.0 47.9 25.6 14.8 8.6 3.1 100.0 Source: MIDEPLAN 1999; p. 82; MIDEPLAN 2005; MIDEPLAN 2008. M. Ola va rria -Ga mbi 108 SOCIAL POLICY: REACHING THE POOR? Previous sections have dealt with the characterization of the poor and specific subsidies targeted to low income people. This section addresses the topic of whether massive social programs are reaching the poor. Some of them are universal, such as those of education, health care, and pensions, while others are targeted ones, such as the School Feeding Program and the Children Feeding Program. Downloaded By: [Loyola University] At: 18:30 4 September 2009 Education Programs The school system in Chile is universal. Primary school is mandatory, reaching practically all children, and secondary education coverage rose from 81.5 percent in 1987 to 92.7 percent of the population younger than 25 years of age in 2003 (see Table 6). The long tradition of education policies, emerging shortly after the independence, has led the country to have an increasing educational coverage and comparatively good standards in the Latin American context. As of 2006, Chileans showed a illiteracy rate of 2.9 percent (CEPAL, 2007) and 10.14 years of schooling on average. The Latin American schooling average of people age 25 and older was 5.8 years by the early 2000s (De Ferranti & Ody, 2006). Currently the school system is structured on the basis of municipal schools, the school voucher system, and entirely private schools. Municipals are public schools managed by Municipal Educational Corporations. The school voucher system corresponds to private schools receiving subsidies TABLE 6 Educational Coverage (%) and Average Schooling Years, Age 15 and Older Educational coverage Year Circa 1958 1962 – 1964 1970 1980 1987 1990 1992 1994 1996 1998 2000 2003 2006 Primary 96,4 96,8 97,4 97,6 98,2 98,3 98,6 99,1 99,0 Secundary Average schooling years 81,5 80,5 84,2 84,2 85,9 86,9 90,0 92,7 92,0 3,3 (1) 4,2 (2) 4,3 7,6 8,3 8,9 9,0 9,1 9,5 9,7 9,8 10,12 10,14 Source: Data series 1987–2006 are based on CASEN. Data 1958–1980 has beed taken from Ahumada (1958), Aylwin et al (1990), Libertad y Desarrollo (2000). Note: Ahumada (1) and Aylwin et al (2) report these numbers, but they do not specify the range of age considered. Downloaded By: [Loyola University] At: 18:30 4 September 2009 Poverty a nd Socia l Progra ms in Chile 109 from the government for each student attending them. The entirely private schools are the ones that do not receive such subsidies and, consequently, families completely pay tuition and fees charged. Municipal schools show the highest coverage among the lowest income people, the school voucher system increases educational participation among middle income people, and the richest 20 percent of children mostly attend private schools (MIDEPLAN, 1999, p. 44; MIDEPLAN, 2005). An important complementary program to the educational system is the School Feeding Program. This is a program that delivers breakfasts, lunches, and snacks to poor students, from ages six to fourteen, attending schools belonging to the municipal and voucher systems. This program was created in 1964 and it is managed by an agency of the Ministry of Education called “Junta Nacional de Auxilio Escolar y Becas” (National Council of Scholastic Aid and Grants). Beyond the analysis of the attendance by type of school and economic stratum, an analysis on the likelihood of school attendance among the lowincome people has been performed. It is important to realize whether the poor have real possibilities to access the school system. Results show that the poor are likely to attend school. This finding is consistent with the analysis of the School Feeding Program, which shows that poor children are more likely to participate in the program. In turn, the government reports successful targeting of this program to the poorest attending schools from the voucher system (MIDEPLAN, 1999, p. 41; MIDEPLAN, 2005). This leads to the conclusion that the reason that a poor child is more inclined to attend the school would be that the feeding program works as an extra incentive other than the attraction of learning itself. The analysis on education programs from the point of view of either the coverage, attendance, or the likelihood of a poor child to get education shows that the school system is reaching the poor. By the same token, considering that poor families face an increasing opportunity cost of sending their children to school, the School Feeding Program seems to be a good complementary mechanism to keep poor children in school and improve their future possibilities in life. Health Programs Chile’s tradition of efforts in health issues began to develop in 1887 with the creation of the General Council of Sanitation (Junta General de Salubridad), an agency in charge of public hygiene and sanitation. Later, by the mid 1920s, health care programs were organized around the recently created social security funds but mainly oriented to formal workers. Since then the system expanded constantly and several reforms were undertaken. In 1952, the health care system was reformed, creating the National Health Service (SNS), which expanded health care to the population at large regardless of Downloaded By: [Loyola University] At: 18:30 4 September 2009 110 M. Ola va rria -Ga mbi their ability to pay. In 1968, the system was complemented with the rise of the National Service for Employees (SERMENA), a program delivering health care for white collar workers. In 1980 both SNS and SERMENA were merged into the National Fund of Health (FONASA). Private participation in organizing health care protection plans was introduced in 1980 with the creation of the ISAPREs—a close equivalent of the U.S. HMOs. Chile’s current public health care system, organized around FONASA, is universal. However, workers have the freedom to choose to be covered by a private one, namely ISAPREs. Workers have an automatic legal deduction of seven percent from their salaries to have health care coverage, for them and their families, from either an ISAPRE or FONASA. People lacking health care protection still can get medical help from the public system but under the indigent modality, which is a mean-tested benefit. ISAPRE contributors can choose their physician, hospital, or other health care supplier and face a copay for every service received. FONASA contributors can get medical care under two modalities: free choice or institutional modality. Under the latter, people must get the service in public hospitals or community health centers. There is no copay requirement for people lacking financial capacity. This is called the indigent modality of health care services. For other people there is a copay of 25 or 50 percent of the cost of the service rendered, depending on their level of income. Under the free choice modality, people can get the service from private suppliers registered in FONASA but the copay is usually higher because it depends on the price charged by the supplier. Public hospitals and community health centers often have been criticized as having long waiting lists, inadequate facilities and equipment, and a lack of enough medicines and resources to deliver proper medical care. The poorest mostly get health care assistance under the indigent modality; among low to middle-income people FONASA is the main mean to get health care coverage while ISAPREs concentrate in the highest income people. Between 1987 and 2006 the indigent modality increased its relative importance among the poorest 20 percent of the population but decreased in the other quintiles; FONASA decreased in every segment until the year 2000; and the ISAPRE system raised its participation among the low to middle-income people and consolidated among the richest 20 percent of people. Despite that, as of the year 2000, FONASA was the main mean to get health care protection, covering 41.7 percent of the population, followed by the indigent modality, which covered 24.8 percent, and ISAPREs covered 23.1 percent (MIDEPLAN, 1999, pp. 49–50; MIDEPLAN 2003). As of 2006, the public system (FONASA plus the indigent modality) covered 69.5 percent of the population, 16.3 were covered by ISAPREs, and the remaining 14.2 percent were covered by the Armed Forces Health Care System and other coverages (FONASA 2007). Downloaded By: [Loyola University] At: 18:30 4 September 2009 Poverty a nd Socia l Progra ms in Chile 111 Statistical analysis shows, as expected, that low income people—indigents, poor non–indigents and almost-poor people—are more likely to receive medical service under the indigent modality. In addition, the predicted probability of getting medical services under this modality increased along the period 1987–2006 not only for indigents and poor non-indigent individuals but also for almost-poor people, whom are considered to be non-poor by official estimations (Table 7). Although it is expected that the poor receive health care services under the indigent modality, it is somewhat surprising that the likelihood of the almost poor of getting health care attention under this modality increased despite the diminishing poverty trend of the period. This suggests either a lack of social security protection mechanisms for health care or insufficient benefits in the heath care plans of this population segment. This should be related to the already mentioned fact that low income people—indigents, poor non-indigents and almost-poor people—are less likely to receive medical help when sick. Then, though the almost poor are more likely to have health care protection from FONASA—or could eventually get it from an ISAPRE as well—the FONASA’s high copays or the low levels of benefits of the ISAPRE’s health care plans they can afford would lead them to seek service under the indigent modality when sick or injured. An important and successful health program is the “Children Complementary Nutrition Program” (PNAC). Created in 1954 and managed by the Ministry of Health, this program delivers milk and other nutritional products to children under six years of age, pregnant women, and wet-nurses to prevent or remedy situations of under-nourishment. To get the benefits, mothers must take children to periodical medical exams to control their health status. Although formally universal, the program is in fact a self-targeted one for two reasons. First, because it addresses undernourishment, the program focuses on children from low income families since they are the ones with the highest risk of undernourishment. Second, because higher income mothers face an increasing opportunity cost, which lead them to drop the program, those mothers take their children to private physicians in a more convenient time for them and buy milk and feeding products through the market. Statistical analysis shows that children under five from lowincome families are more likely to access PNAC. Chile exhibits a long tradition of concern for the health status of the population, a high coverage of the system and comparatively good health standards. For instance, life expectancy in Chile is 78.4 years as of 2006 (PAHO, 2008), the second highest in Latin America, the under-nutrition rate fell from 15.5 in 1970 to 3.8 6 percent in 2004 (MINSAL, 2005) and infant 6 This index is composed as follows: children in risk of undernourishment: 3.2 percent; children undernourished: 0.5 percent and children with secondary undernourishment: 0.1 percent. Downloaded By: [Loyola University] At: 18:30 4 September 2009 TABLE 7 Predicted Probability of Receiving Medical Services Either as Indigent or Through FONASA (the Public Health Care Plan) Sorted by Poverty and Almost Poverty, 1987–1998. 112 Health Care as Indigent Health Care through FONASA Poor Almost Poor Poor Almost Poor 1987 1990 1992 1994 1996 1998 2000 2003 2006 0.4446 0.3828 0.5360 0.5750 0.4477 0.3874 0.4909 0.5270 0.4604 0.3988 0.4511 0.4769 0.5635 0.4837 0.3518 0.4022 0.5146 0.4209 0.4083 0.4536 0.5640 0.4539 0.3792 0.4404 0.6691 0.5299 0.3081 0.4230 0.6896 0.5520 0.2949 0.4141 0.7057 0.5506 0.2770 0.4252 Source: Author’s calculation based on CASEN surveys. Notes: (1) See appendix 4 for results of the multinomial logit regression; (2) Variables controlled for: socioeconomic stratum, gender, area of residence, age, schooling level and marital status. Poverty a nd Socia l Progra ms in Chile 113 mortality diminished from 153.2 in 1950 to 7.2 per thousand born alive in 2005–2010 (CEPAL, 2007). However, in practice, not only the poor but also the almost poor in this study have serious restrictions to satisfy their needs on health care services. Their only choice is to get medical help from deteriorated and insolvent hospitals and community health centers, which can barely deliver a quality and opportune service. Coincidentally, the poor and almost-poor people are less likely to have medical help when sick. Then, the health care system would be inadequately reaching the poor: they would be formally but not effectively covered. Downloaded By: [Loyola University] At: 18:30 4 September 2009 Social Security The first social security initiatives arose in Chile in 1832 with the Funds protecting destitute people, the pension program for death of the military in 1855, the Saving Fund of the civil servants in 1858 and the Pension Funds for the Railroad Workers in 1918. By the mid 1920s an extensive social security system was created. The system was mainly oriented to formal workers, structured on a pay-as-you-go basis and managed by semiautonomous agencies—the social security funds. Chile’s social security system was reformed in 1980 after a deep crisis characterized by a financial insolvency, inequality in the distribution of benefits and administrative inefficiency (SAFP, 1998). Funds were merged into the Institute of Social Security Normalization (INP), a public agency whose mission is to administer contributions and pensions of the old pay-as-you-go system. In addition, a new system was created on the following basis: privately managed by Pension Fund Administrators (AFPs) but supervised by the government, workers contribute to a personal account, AFPs invest pension funds seeking profits and security, worker’s pensions are a direct consequence of contributions and profits earned, and the workers are free to choose the AFP that manage their individual pension funds (Olavarria-Gambi, 2000). Both systems have coexisted since the enactment of the private one but the INP system is in extinction: workers contributing to the pay-as-you-go scheme can remain in it until they retire while new workers must enroll in the private system. The Chilean social security system expanded rapidly since its inception, making Chile stand out for the broad coverage of the system (Raczynski, 1994); however, neither the pay-as-you-go scheme nor the private pension system have gotten a complete coverage of the labor force. The pay-as-you-go scheme reached a pick coverage of 79 percent in 1973. By 1980, when it was reformed, it covered 64 percent of the labor force. As of 2005, the Chilean pension system covered 70.12 percent of the labor force, being 67.75 percent contributors of the private pension system and the remaining 2.37 percent still contributed to the old pay-as-you-go plan (SAFP, 2007). It has been difficult for the poor to get effective protection from the social security system. Under the pay-as-you-go scheme social security Downloaded By: [Loyola University] At: 18:30 4 September 2009 114 M. Ola va rria -Ga mbi protection was restricted to workers but the poor—non-salaried people, occasional laborers, seasonal workers, craftsmen, people working in the peasant economy and so on—could barely have that protection since they could rarely get formal jobs. In addition, benefits received by different sectors of workers corresponded to their political influence, resulting in poorer workers having the hardest condition to retire. For instance, blue-collar workers, which contributed to the Social Security Fund (SSS), could retire at the age of 65for men, and women at the age of 55, while white collar workers contributing to the Civil Servant Security Fund could retire having worked a minimum of 20 years.7 Thus, somebody who started to work at the age of 18 and contributed to these funds, could retire at the age of 38. Blue-collar workers never got that possibility. By 1980, 65 percent of workers contributed to the Social Security Fund, 18 percent to the Private Employees Security Fund, 12 percent to the Civil Servant Security Fund and the remaining five percent to other minor funds (Cheyre, 1991; SAFP, 1998). Some methods of minimum protection have been created during the last decades for workers contributing to social security and even for those lacking such coverage. According to the law, people contributing to private pension plans have at least a minimum pension assured no matter the amount of the individual fund accumulated. This is particularly important for low-income workers whose accumulated fund could be lower than needed to get a higher pension. In addition, the “Assistance Pension” (PASIS, as it called in Spanish), created in 1975, delivers a small pension to old age and disabled people who do not get any other pension and whose total income is not greater than 50 percent of the minimum pension. As reported, low income people are generally more likely to get PASIS. Nevertheless, beyond this small emergency help, coverage of the social security system looks problematic among the low-income people, who are more likely to lack coverage from the pension system—either the private or the public one. Low income people show a high probability to lack social security plan coverage (see Table 8). Although the almost-poor are more likely to be enrolled in a social security plan than the poor, such coverage is still low among them. Similarly, females are more likely to lack social security protection. The Presidential Advisory Commission for the Pension Reform has concluded that the private pension system is not in crisis and proposed reforms due to the demographic and labor market changes that occurred since the inception of this system in 1980. According to the Counsel (Consejo 7 Before the enactment of the Decree Law 2448 in 1979, in cases of firing, the minimum requirement for a public employee to retire was 15 years of contributions. In that situation, pension was around a half (15/30)of the normal pension. That Decree Law increases that minimum requirement to 20 years of contributions. Before the Decree Law 2448, the standard requirement to retire was 30 years of contributions. The Decree Law added the requirement of 65 years of age for men and 60 for women. See: Republic of Chile, Decree Law 2448, 1979. Poverty a nd Socia l Progra ms in Chile 115 TABLE 8 Predicted Probability of not Having Social Security Plan Coverage Sorted by Poverty and Almost Poverty, 1987–2006. 1987 1992 1994 1996 1998 2003 2006 Lacking Social Poor 0.6378 0.5278 0.6447 0.6357 0.6553 0.4865 0.7096 Security Coverage Almost Poor 0.6113 0.4846 0.5982 0.5838 0.5953 0.4485 0.6232 Downloaded By: [Loyola University] At: 18:30 4 September 2009 Source: Author’s calculation based on CASEN surveys. Notes: (1) See appendix 5 for results of the multinomial logit regression; (2) Variables controlled for: socioeconomic stratum, gender, area of residence, age, schooling level and marital status. Presidencial para la Reforma Previsional, 2006), the workers who have had stable employment and a record of regular contributions to the system will get a pension close to the salary they had before retiring; however, many workers—those who are self-employed, the informal ones, those earning around the minimum salary and an important proportion of the females—will not be able to fulfill the basic requirement of having contributed at least 240 months to be able to get the minimum pension guaranteed by the government. Thus, according to the Counsel, within the next 20 years, around a 50 percent of the current workers will get a pension higher than the minimum one, less than a five percent will be able to obtain the minimum pension, and the rest will get a pension lower than the minimum pension only, an Assistance Pension (PASIS, as it is called in Spanish), or no pension at all. To address these issues the Counsel has proposed a reform based on the creation of a pillar of solidarity, the establishment of tax incentives for self employed workers to contribute to the pension system as well as access to the same benefits of the dependent workers, the introduction of criteria of gender equity, increasing competency within the pension system, and improving regulatory institutions so that investments may be kept profitable and secure. On December 19, 2006 the President sent to the Congress the bill reforming the pension system and on March 2008 it was enacted as the law 20,255. Seen in perspective, although the social security system coverage has been in expansion since its creation, reaching 70.12 percent of the labor force by 2005 (SAFP, 2007), and complementary mechanisms have been created during the last decades, the true fact is that social security protection—as old age and disability pensions—is still precarious for low income people and women. Thus the reform may be seen as a serious effort oriented to expand worker protection for the time when their capacities to work had been extinguished. EXPANDING SOCIAL PROTECTION Given the fact that indigence did not fall between 1996 and 2000, and thatas shown in this articlethe very poor have difficulties in accessing to social Downloaded By: [Loyola University] At: 18:30 4 September 2009 116 M. Ola va rria -Ga mbi services, the government created a Social Protection Program called “Chile Solidario” with the purpose of addressing the vulnerability of extremely poor people. The program was designed between 2000 and 2002, implemented by FOSIS8 as a Pilot Program from 2002—under the name of Programa Puente (Bridge Program)—and enacted as the law 19,949 in 2004. Similarly, due to the difficulties of low income people in accessing opportune and affordable health care services the government implemented the so-called Plan AUGE, later renamed as GES.9 AUGE-GES is a health care protection system that guarantees coverage for a set of illnesses included in the Plan. Chile Solidario is a mean tested program targeting extremely poor people. The ficha CAS (CAS Card)before 2006and the Ficha Familia (Family Card) since then have been the instruments used to determine whether a given household can qualify to the program. According to MIDEPLAN (2006), as of the year 2005, 209,398 households and 15,675 people older than 65 years of age living alone qualified to Chile Solidario. Target population has been invited to participate, since the rejection rate is very small—around five percent—and full coverage (invitation) was achieved by March 2006. The Program has three areas of intervention,called componentes, which are as follows: (i) personalized psychosocial support and a protection voucher; (ii) guaranteed money subsidies; and (iii) preferred access to social promotion programs. The psychosocial support is an intervention conducted by a Social Worker—called Apoyo Familiar (Family Support)—seeking to help the extremely poor households in the process of achieving an acceptable standard of living. This expression refers to 53 minimum conditions that the households receiving the psychosocial support are expected to achieve in the following dimensions: identification, health care, education, family living, housing, work, and income. This intervention lasts two years, during which the household is entitled to receive the protection voucher, consisting of an amount of money given to the mother, which decreases every six month and extinguishes by the end of the psychosocial support. The second area of intervention seeks to guarantee to those qualifying households access to SUF, PASIS, Subsidy of Drinking Water (SAP), Subsidy for School Retention, and the Graduation Voucher, a subsidy equivalent to SUF that households receive after finishing its participation in the Bridge Program (personalized psychosocial support and a protection voucher). During the intervention seeking to guarantee preferred access to programs on social promotion, MIDEPLAN set agreements with public organizations delivering social programs for Chile Solidario’s participants to get preferred access to the programs they manage. 8 FOSIS is the Chilean Social Investment Fund. Plan AUGE means Plan for Universal Access with Explicit Guarantees. And GES means Explicit Guarantees on Health Care. 9 Downloaded By: [Loyola University] At: 18:30 4 September 2009 Poverty a nd Socia l Progra ms in Chile 117 All households participating in the Chile Solidario Program must go through the process just one time. The program has been designed for participants going from one stage to the next—starting in the Bridge Program and ending in the access to social promotion programs. If a household does not meet the 53 minimum conditions by the end of the psychosocial support or its achievement on the minimum fall later, that particular household cannot receive the intervention again. After the two-year-period of the Bridge Program, Chile Solidario’s participants spend three years in a follow up process during which they receive the Graduation (of Bridge Program) Voucher. It is expected that after the five-year-intervention, households participating in Chile Solidario overcome extreme poverty and may autonomously access services delivered by government organizations. No households have completed the all stages of Chile Solidario yet so there is not an impact or a result evaluation on the whole intervention available. However, available indicators show some outcomes of the program at this stage. According to Serrano (2005) qualitative evaluations have shown achievements and limitations of the intervention. Among one of the most important achievements of Chile Solidario is that the psychosocial support has led extremely poor people to access public social services as well as to generate among them a will to improve their living condition. Among the limitations is the fact that an over-expectation has been generated that Chile Solidario may solve such concrete and difficult problems faced by extremely poor households such as housing and the generation of sustainable income, which may lead to deception. On the other hand, based on the Bridge Program Data Base, Santibáñez (2006) reports that 64% of the households completing the psychosocial support achieved the 53 minimum conditions established by the Bridge Program but just 37.1 percent was able to maintain that achievement short time later, when the final card with data on the graduated from the Bridge Program was collected. The criteria of success set to this program was that 70 percent of the participants graduated with the 53 minimum conditions achieved. By the same token, evaluating the effect of the first two years of the program, Galasso (2006) found that participants households tend to improve their outcomes on education and health care, increase their access to money subsidies, housing and employment programs but no evidence was found that that had translated into an improvement in employment or income outcomes in the short term. These very preliminary results are opening question on the effectiveness of Chile Solidario in overcoming extreme poverty. Given that households receive the treatment just one time, that 36% of the participants did not achieve all the 53 minimum conditions, that 26.9% of the intervened households were not able to keep the minimum conditions they had achieved and that there was no evidence on the improvement of employment or income outcomes of participants, the question about whether Chile Solidario is an Downloaded By: [Loyola University] At: 18:30 4 September 2009 118 M. Ola va rria -Ga mbi effective intervention to overcome extreme poverty is raising. At this stage, most positive results of the program are in its qualitative side. Coincidently with Serrano (2005), Galasso (2006) found that the role of the psychosocial support has been fundamental in participants achieving a better awareness of social services and orientation to the future. Although these are very preliminary results, from the earliest stages of the program, and more definitive outcomes and impacts will be captured in future evaluations, they may suggest the need to stress the role of the psychosocial support and reform the areas of the programs related to outcomes on employment and income. AUGE-GES is part of a reform seeking to guarantee universal access to health care. To reach that end, apart from the system of health care guaranteed, the reform addresses issues about hospital management, health care financing, rights and protection of ISAPREs’s enrollees as well as rights and duties of patients. It started on July 1, 2005 covering 25 illnesses, later expanded to 40 types of illnesses and from 2007 expanded again to 56 illnesses. The financing for those enrolled in FONASA or the indigent lacking a health care plan is provided by the public coffer while ISAPREs’s enrollees have a copay of 20% of the respective tariff of reference and the rest has to be covered by the ISAPRE. The Chilean Medical Association10 (Colegio Médico de Chile, 2007) has critically stated that the Plan AUGE-GES “is not a health care plan for a health care system” but a health care insurance to be managed by both public and private organizations. The Medical Association has also criticized AUGE-GES for not being a plan with real universal access to health care but a segmented plan of services with a guaranteed component and another component not guaranteed. Thus, the Medical Association has called AUGE-GES an “eventually Basic Plan” of health care. Evaluations on the implementation of AUGE-GES performed by the “Superintendencia de Salud”11 (2007) have found that FONASA enrollees have used AUGE-GES five times more than ISAPREs enrollees, that AUGE-GES is used by all socioeconomic strata, that there are important differences in the use of coverage for the different heath problems, and that in its first year of implementation–based on data available on 83% of services provided— AUGE-GES has not been able to reach the level of use that the health care system had prior to the reform. Seen in perspective, AUGE-GES can be seen as a serious effort to expand the social protection coverage on health care, specially oriented to the protection of low-income people. Although it started covering a very limited number of illnesses, it has shown a trend of increasing expansion to 10 Its name in Spanish is “Colegio Médico de Chile.” The “Superintendencia de Salud” is the public organization in charge of the regulation of the provision of health care services. 11 Poverty a nd Socia l Progra ms in Chile 119 cover other illnesses that seriously or frequently affect the Chilean population. Evaluations on the implementation, however, are calling for an extra effort since the access to a health care services for those in need does not seem to have improved. Downloaded By: [Loyola University] At: 18:30 4 September 2009 CONCLUDING REMARKS The analysis presented in this work has shown that the poor are mainly women, people younger than 40 years of age, urban residents, individuals with less than eight years of schooling, and people likely to be healthy but less likely to receive health care services when sick or injured. The analysis also shows that there is a persistent association between low education and poverty either by analyzing the likelihood of a poor to get different levels of education or that of an individual with low education to be poor. Furthermore, statistical analysis results show, as expected, that people who have achieved college education are highly likely to belong to the medium-high income stratum and, correspondingly, unlikely to be poor. This finding, however, opens a question that later research should address: Why are there people with higher education who are poor? On the other hand, even though almost-poor people could be covered by either FONASA or a ISAPRE, they exhibit a high likelihood to get medical help under the indigent modality of health services. Similarly, the likelihood to lack social security protection is high for low income people and the poorer the person the higher that likelihood. All of this is showing a precarious social protection system for the poor in episodes of sickness, old age and disability. While the middle class and high-income people have effective mechanisms to face those events, the poor are alone during those difficult times. The pension reform under the parliamentary discussion seek to address this issue bringing more equity to the system. To strengthen social protection for the extreme poor government has created the Chile Solidario Program with the purpose of making accessible to the extreme poor public social services, improving the poor’s living standards and, finally, making the process of overcoming extreme poverty self-sustainable. Although the extreme poor have increased their access to public social services, the limited evidence available so far would suggest that the program may need a second thought to get intervened households out of extreme poverty once they have completed the program. Similarly, although AUGE-GES is a serious effort to expand the social protection coverage on health care for the disadvantaged, access to medical services when needed is still not better than before the reform. Chile exhibits good social indicators. The long tradition of social policies has played a fundamental role on it. Education expanded to a point that today practically all children attend primary school and 92.7 percent of the Downloaded By: [Loyola University] At: 18:30 4 September 2009 120 M. Ola va rria -Ga mbi young population access secondary school (MIDEPLAN, 2005). What is considered low education in Chile, or less than eight years of schooling, is substantially higher than the Latin American average of 5.2 years. The health care system expanded during the 20 th century, which contributed to increased life expectancy, and to a lower the infant mortality rate—which is comparable to those of the developed countries—and to the fact that even the poorest present an increasing marginal likelihood to be healthy. By the same token, although oriented to formal workers, the social security system greatly expanded since the 1920s, reaching 70.12 percent of the labor force by 2005. These attainments have been the result of a long process, taking decades, of country’s concerns, government efforts and social progress. However, the ones left behind have been always the same: the poor. Notwithstanding Chile’s impressive social development, social protection for the poor is still precarious. The fact that the poor areless likely to get medical help when sick and are unlikely to get social security protection is a situation that not only affects the poor but those lying on or just above the poverty line, namely the almost-poor. As shown, one of the few valuable assets of the poor is to keep healthy. Then the lack of access to such medical help for the poor means to cut a way to exit poverty and for the almost-poor means to increase greatly their likelihood to either fall or return to poverty. Lack of social security protection in the old age or disability for these people means that the only possible future for them is poverty. Consequently, the policy lesson today is the need to strengthen the effectiveness of social protection for the poor. Although coverage of major social programs have greatly expanded, health care and social security still are not completely accessible to the poor. To make social protection effectively available to the disadvantaged is one of the most important contributions that social policy can make in order to make the process of overcoming poverty a sustainable one. Otherwise, the poor will be condemned to continue seeing how progress goes by in front of them. ACKNOWLEDGEMENTS This article is part of the research project “Inequality,” which has received financial support from the University of Chile’s Vice-Presidency of Research and Development. REFERENCES Ahumada, J. (1958). En Vez de la Miseria . Santiago, Chile: Editorial Del Pacífico Akin, J., Griffin, C., Guilkey, D., and Popkin, B. (1985). The Dema nd for Prima ry Hea lth Services in the Third World . 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Key economic a nd socia l cha llenges for La tin America : Perspectives from recent studies. Working Paper, World Fund. Ferreira, F. & Litchfield, J. (1998). Ca lm a fter the storms. Income distribution in Chile, 1987–1994. Policy Research Working Paper 1960. Washington, DC: The World Bank. FONASA. (2007). Protección Socia l en Sa lud en Chile . Santiago, Chile: FONASA. Galasso, E. (2006). With their effort a nd one opportunity: Allevia ting extreme poverty in Chile . Development Research Group Working Paper. Washington, DC: World Bank. Giovagnoli, P., Pizzolito, G., & Trias, J. (2005). Monitoring the socioeconomic conditions in Argentina, Chile, Paraguay and Uruguay: CHILE. CEDLAS Paper. Washington, DC: The World Bank. INE, National Institute of Statistics (2008). Merca do del Tra ba jo-Empleo . Retrieved October 2008 from www.ine.cl INE, National Institute of Statistics (1999, November). Esta dística s de Chile en el Siglo XX. Santiago, Chile: Author Larrañaga, Osvaldo (1997). Educación y superación de la pobreza en América Latina, en J. V. Zevallos, (Ed.), Estra tegia s pa ra reducir la pobreza en América La tina (pp. 321–383). Quito, Ecuador: PNUD. Larrañaga, O., & Sanhueza, G. (1994). Descomposición de la pobreza en Chile con ba se en la función lognorma l despla za da , Working Paper, ILADES/Georgetown University. Santiago, Chile: ILADES. Downloaded By: [Loyola University] At: 18:30 4 September 2009 122 M. Ola va rria -Ga mbi Meller, P. (2000). Pobreza y distribución del ingreso en Chile (Déca da del 90). Working Paper No. 69, Departamento de Ingeniería Industrial, Universidad de Chile. Santiago, Chile: DII, Universidad de Chile. MIDEPLAN. (1999). Módulo Serie 1987–1998.” Sa ntia go de Chile: Serie CASEN 98 . Santiago de Chile: MIDEPLAN, Departamento de Información Social. MIDEPLAN. (2003). CASEN 2003: Principa les Resulta dos del Módulo de Sa lud . Santiago, Chile: MIDEPLAN. MIDEPLAN. (2005). CASEN 2003 . Santiago de Chile: MIDEPLAN, Departamento de Información Social. MIDEPLAN. (2008). CASEN 2006: Distribución del ingreso e impa cto distributivo del ga sto socia l. Santiago de Chile: MIDEPLAN, Departamento de Información Social. MINSAL. (2005). Indica dores de Sa lud . Santiago, Chile: Author. Olavarria-Gambi, M. (2000). Social security in perspective: A parallel between Chile and the United States. Georgetown Public Policy Review , 5(2), 165–182. Olavarria-Gambi, M. (2005). Pobreza , crecimiento económico y politica s socia les. Santiago, Chile: Editorial Universitaria. PAHO, Pan-American Health Organization, (1998). Hea lth in the America s. Scientific Publication No. 569. Washington, DC: PAHO. PAHO, Pan-American Health Organization, (2008). Ba se de da tos de indica dores bá sicos. Retrieved March 2008 from www.paho.org Raczynski, D. (1994). Social policies in Chile: Origin, transformation and perspective. University of Notre Dame’s Kellog Institute, Democracy and Social Policy Series, Working Paper No. 4. Notre Dame, Indiana, Kellog Institute. Santibáñez, C. (2006). Pobreza y desigualdad en Chile: Antecedentes para la construcción de un sistema de protección social. Banco Interamericano de Desarrollo, Serie de Estudios Económicos y Sociales. Serrano, C. (2005). Claves de la política social para la pobreza. Working Paper. Santiago, Chile: Asesorías para el Desarrollo. SAFP, Superintendencia de Administradoras de Fondos de Pensiones. (1998). El sistema chileno de pensiones. Santiago, Chile: Author. SAFP, Superintendencia de Administradoras de Fondos de Pensiones. (2007). El sistema chileno de pensiones, Sexta Edición . Santiago, Chile: Author. Superintendencia de Salud. (2007). Eva lua ción de la reforma de sa lud y situa ción del sistema de ISAPREs. Diseño metodológico y definición de línea s ba sa les. Santiago, Chile: Author. Torche, A. (1999). Pobreza y distribución del ingreso en Chile: Logros y desa fíos. Unpublished Draft. Santiago, Chile. UNESCO. (1998). Informe Mundia l sobre la Educa ción 1998 . Madrid, Spain: Author. World Bank. (2001). Chile. Poverty and Income Distribution in a High Growth Economy. The case of Chile 1987–1998. Report No. 22037–CH. Washington, DC: World Bank. World Bank. (2006). World developm ent report 2006: Equity & developm ent. Washington, DC: World Bank, Oxford University Press. World B ank. (2007). Reseña sobre Chile. Retrieved January 2008 from www.bancomundial.org/alc Poverty a nd Socia l Progra ms in Chile 123 APPENDIX 1 Downloaded By: [Loyola University] At: 18:30 4 September 2009 Data and Methodology The analysis presented in this work has been performed on data from the nine available CASEN surveys. This is a national representative based on a probabilistic sampling survey taken by the University of Chile’s Department of Economics on behalf of the Chile’s Ministry of Planning and Cooperation. CASEN has been processed in the Santiago headquarters of the United Nation’s Economic Commission for Latin American and the Caribbean. The main purpose of the survey is to provide valid information to analyze socio-economic characteristics of the Chilean population and to monitor the performance of social programs. A multinomial logit model has been applied to estimate the likelihood of being poor (Equation 1), having health care coverage (Equation 2) and being covered by a pension plan (Equation 3) given background characteristics. In addition, a probit model has been employed to determine the marginal likelihood of being poor or non-poor having different background characteristics (Equation 4), the marginal likelihood of access to social service for people from different socio-economic strata (Equation 5), and the marginal likelihood of being healthy and receiving or not receiving medical help in case of sickness (Equation 6). Dummy variables have been constructed for socio-economic stratum, education levels, health status, social programs, and background characteristics such as gender, age, residence in urban or rural areas, and marital status. The unit of analysis is the individual and multinomial logit and MLE probit models have been estimated at that level. Equation 1 : poorsta tti = b1 + b2 Fem ti + b3 Rurti + b4 AGEti + b5 SLti + b6 MStti + e ti Where: poorstat is an unordered dependent variable including the following categories: poorstat = 0 if poor (income less than 2 basic basket of food) poorstat = 1 if almost poor (income between 2 and 3 basic baskets of food) poorstat = 2 if medium high income (income higher than 3 basic baskets of food) Comparison group : medium high income Equation 2: hea lsta tti = b1 + b2 SECSti + b3 Fem ti + b4 Rurti + b5 AGEti + b6 MSti + e ti Where: healstat is an unordered dependent variable including the following categories: healstat = 0 if lacking a health plan 124 M. Ola va rria -Ga mbi healstat = 1 if having the public health plan (salupub) healstat = 2 if having the private health (isapre) Comparison group : having the private health plan Equation 3: penssta tti = b1 + b2 SECSti + b3 Fem ti + b4 Rurti + b5 AGEti + b6 MSti + e ti Where: Downloaded By: [Loyola University] At: 18:30 4 September 2009 pensstat is an unordered dependent variable including the following categories: pensstat = 0 if lacking a pension plan pensstat = 1 if having the public pension plan (inp) pensstat = 2 if having the private pension plan (afp) Comparison group : having the private pension plan Equation 4: SECSti = b1 + b2 Fem ti + b3 Rurti + b4 AGEti + b5 SLti + b6 MSti + e ti Equation 5: PPti = b1 + b2 SECSti + b3 Fem ti + b4 Rurti + b5 AGEti + b6 SLti + b7 MSti + e ti Equation 6 : HSti = b1 + b2 SECSti + b3 Fem ti + b4 Rurti + b5 AGEti + b6 SLti + b7 MSti + e t Where: PP represents participation in the program, Fem stands for female, Rur represents population living in rural areas, SECS stand for socio-economic stratums, AGE represents a vector of age dummies, SL means schooling levels and MS stands for marital status. Variants of these models also include controls for either whether the person is self-employed or a low qualification worker. Dummy variables have been created to represent different socio-economic strata, age, schooling, and marital status categories as follows. Socioeconomic stratums considered are: indigent, poor, almost-poor, and medium-high income. The criteria to distinguish among them is whether income falls below one, two, or three values of a basic basket of food. 1 If so, they are indigent, poor, or almost-poor. If their income is above the value of three basic baskets of food, then they are classified as mediumhigh income. These values correspond to population living in urban areas. For the rural population the values are 0.75, 1.5 and 2.5 values of the basic basket of food. In the case of people’s age the categories considered are: 0 1 A basic basket of food is a measure that identify the minimum income needed by a person to satisfy his or her nutritional needs. It is constructed considering the minimum required consumption of calories and proteins according to the World Health Organization standards, the population consumption habits, and market prices. Poverty a nd Socia l Progra ms in Chile 125 Downloaded By: [Loyola University] At: 18:30 4 September 2009 to 4 years, 5 to 14 years, 15 to 19 years, 20 to 39 years, 40 to 65 years and 66 years and over. The category of 40 to 65 years of age has been identified as the reference group. The categories considered for schooling level are: no education at all, 1 to 4 years of schooling, 5 to 7, 8 years of schooling, 9 to 11, 12, and more than 12 years of schooling. Eight years of schooling has been taken as the reference group. Categories for marital status are: couples (either married or living together), living alone (either single, separated, or divorced), and widow(er)s. Couples are the reference group for marital status. Appendices present results of the multinomial logit models. Tables presenting results of the marginal probability probit model have been omitted due to their excessive length. However, they are available upon request. Downloaded By: [Loyola University] At: 18:30 4 September 2009 APPENDIX 2 Selected Multinomial Results for Poverty Sorting (Base Category: Medium and High Income People) 1987 Variable Femaler Poor Almost poor 126 0.0340 -0.0238 (.0174) (0.0213) Rural -0.3461 -0.1134 (0.0205) (0.0249) Age 20to 39 1.2060 0.6468 (0.0246) (0.0298) Age 66 and -0.4246 -0.0486 over (0.0384) (0.0432) Schooling 0 1.2234 0.7640 (0.0507) (0.0612) Schoolingd 0.3773 0.2634 5 to 7 (0.0337) (0.0415) Schooling 12 -1.0163 -0.4587 (0.0378) (0.0457) -1.3375 -0.9552 Schooling greater (0.3558) (0.0441) than 12 Single, -0.4237 -0.0703 separated, (0.0224) (0.0268) divorced Constant -0.3431 -0.9812 (0.0328) (0.0402) Númber of 74,213 Observ Prob>chi2 0.000 Pseudo R2 0.0549 1990 1992 1994 1996 1998 2000 2003 2006 Poor Almost poor Poor Almost poor Poor Almost poor Poor Almost poor Poor Almost poor Poor Almost poor Poor Almost poor Poor Almost poor 0.1012 (0.0172) -0.7831 (0.0202) 1.1403 (0.0233) -0.6884 (0.0398) 0.6160 (0.0449) 0.2392 (0.0339) -1.1563 (0.0352) -2.2294 (0.0413) 0.0434 (0.0199) -0.5132 (0.0234) 0.5852 (0.0262) -0.2592 (0.0417) 0.3703 (0.0524) 0.1398 (0.0404) -0.6388 (0.0407) -1.3270 (0.0442) 0.1273 (0.0148) -0.5531 (0.0165) 1.1719 (0.0201) -0.6815 (0.0343) 0.8350 (0.0394) 0.2720 (0.0284) -1.0288 (0.0298) -2.1133 (0.0379) 0.0590 (0.0168) -0.3998 (0.0188) 0.7326 (0.0223) -0.2443 (0.0349) 0.5453 (0.0451) 0.1673 (0.0331) -0.5789 (0.0335) -1.4384 (0.0399) 0.1334 (0.0134) -0.4086 (0.0145) 1.1942 (0.0185) -0.8044 (0.0305) 0.6410 (0.0337) 0.2089 (0.0257) -1.1600 (0.0282) -2.3116 (0.0368) 0.0851 (0.0150) -0.2442 (0.0162) 0.7285 (0.0203) -0.3556 (0.0304) 0.4167 (0.0380) 0.1230 (0.0295) -0.6304 (0.0309) -1.6315 (0.0379) 0.1129 (0.0160) -0.4145 (0.0187) 1.1284 (0.0219) -0.8501 (0.0378) 0.8140 (0.0434) 0.1781 (0.0306) -1.1768 (0.0321) -2.1159 (0.0407) 0.0687 (0.0174) -0.3318 (0.0206) 0.7646 (0.0232) -0.4055 (0.0367) 0.6278 (0.0476) 0.1133 (0.0347) -0.6802 (0.0345) -1.5075 (0.0412) 0.1440 (0.0139) -0.5651 (0.0158) 1.0431 (0.0188) -0.8145 (0.0329) 0.7098 (0.0369) 0.2033 (0.0260) -1.1199 (0.0271) -2.3029 (0.0379) 0.0813 (0.0148) -0.4580 (0.0169) 0.7428 (0.0196) -0.3560 (0.0309) 0.4855 (0.0400) 0.2943 (0.0316) -0.6425 (0.0285) -1.6872 (0.0367) 0.0925 (0.0098) -0.2878 (0.0103) 0.2140 (0.0130) -1.5617 (0.0298) 0.2194 (0.0314) 0.0474 (0.0212) -0.9418 (0.0222) -0.5857 (0.0217) 0.0554 (0.0109) -0.2646 (0.0115) 0.1565 (0.0144) -0.9239 (0.0269) 0.1736 (0.0340) 0.0311 (0.0239) -0.5213 (0.0239) -0.5596 (0.0246) 0.1322 (0.0101) -0.2720 (0.0109) 0.1784 (0.0134) -1.1197 (0.0267) 0.3569 (0.0333) 0.2141 (0.0220) -0.9220 (0.0220) -0.8382 (0.0222) 0.0926 (0.0101) 0.3163 (0.0105) 0.1603 (0.0134) -0.4694 (0.0223) 0.3150 (0.0314) -0.0186 (0.0219) -0.5565 (0.0214) -0.7541 (0.0225) 0.1608 (0.011) -0.4031 (0.012) .01662 (0.015) -1.0392 (0.028) 0.4437 (0.035) 0.1321 (0.024) -0.7951 (0.024) -0.7192 (0.024) 0.1101 (0.011) 0.1477 (0.012) 0.1371 (0.015) -0.4101 (0.028) 0.3664 (0.035) -0.0003 (0.024) -0.5001 (0.024) -0.6751 (0.024) -0.4592 -0.1402 -0.5648 -0.2965 -0.5490 -0.2543 -0.4925 -0.2960 -0.3900 -0.3154 0.1215 0.0498 0.2327 0.1209 0.2960 (0.0223) (0.0249) (0.0192) (0.0212) (0.0175) (0.0190) (0.0210) (0.0220) (0.0181) (0.0189) (0.0131) (0.0144) (0.0135) (0.0134) (0.015) 0.1194 (0.015) -0.2915 -0.7660 -0.2562 -0.9558 -0.6677 -0.9978 -0.9310 -1.1544 -1.0407 -1.1827 -0.6424 -0.9381 -0.7364 -0.9584 -1.3780 -1.221 (0.0329) (0.0384) (0.0392) (0.0321) (0.0259) (0.0293) (0.0300) (0.0331) (0.0254) (0.0273) (0.0200) (0.0223) (0.0197) (0.0198) (0.021) (0.021) 79,715 109,011 136.077 102,814 145,232 252,748 257,019 268873 0.000 0.0708 0.000 0.0645 0.000 0.0693 0.000 0.0654 0.000 0.0648 0.000 0.0316 0.000 0.0317 0.000 0,0270 Note: Standard errors are given in parentheses. Other results not shown here refer to variables representing additional categories for age, schooling levels, and marital status. The constant refers to urban, married men between 40 and 65 years of age, and having eight years of education completed. Downloaded By: [Loyola University] At: 18:30 4 September 2009 APPENDIX 3 Multinomial Results for Poverty Sorting and Schooling of People 24 Years and Over (Base Category: Medium and High Income People) 1987 Variable Poor Almost poor Female −0.02597 −0.0359 Rural Age 20 to 39 127 Age 66 and over Scholling (people age 24 and older) Single, separated or divorced Widow (er) Constant Númber Observations Prob>chi2 Pseudo R2 1990 1992 1994 1996 1998 2000 2003 2006 Poor Almost poor Poor Almost poor Poor Almost poor Poor Almost poor Poor Almost poor Poor Almost poor Poor Almost poor Poor Almost poor (0.0226) −0.6245 (0.0271) 1.3421 (0.0275) −0.6135 (0.0399) −0.2634 (0.0034) (0.0268) −0.3655 (0.0318) 0.7644 (0.0322) −0.1720 (0.0442) −0.1722 (0.0038) 0.0441 (0.0208) −0.8725 (0.0247) 1.1992 (0.0243) −0.8659 (0.0406) −0.2107 (0.0028) 0.0147 (0.0239) −0.6607 (0.0283) 0.6054 (0.0274) −0.3841 (0.0421) −0.1401 (0.0031) 0.0720 (0.0180) −0.6545 (0.0202) 1.2596 (0.0210) −0.8465 (0.0348) −0.2032 (0.0025) 0.0367 (0.0202) −0.5124 (0.0227) 0.7739 (0.0233) −0.3698 (0.0352) −0.1438 (0.0027) 0.0821 (0.0161) −0.5030 (0.0175) 1.2811 (0.0191) −0.9692 (0.0309) −0.2025 (0.0023) 0.0426 (0.0178) −0.3328 (0.0192) 0.7821 (0.0208) −0.4804 (0.0306) −0.1398 (0.0024) 0.0706 (0.0198) −0.6046 (0.0235) 1.2328 (0.0233) −1.0489 (0.0386) −0.2189 (0.0028) 0.0417 (0.0210) −0.4935 (0.0253) 0.8298 (0.0244) −0.5560 (0.0373) −0.1554 (0.0029) 0.0990 (0.0170) −0.6906 (0.0197) 1.1030 (0.0197) −0.9996 (0.0333) −0.2036 (0.0024) 0.0593 (0.0176) −0.5861 (0.0206) 0.7854 (0.0203) −0.5003 (0.0311) −0.1454 (0.0024) 0.0702 (0.0144) −0.6845 (0.0158) 1.0090 (0.0165) −1.5962 (0.0310) −0.1884 (0.0021) 0.0441 (0.0151) −0.6131 (0.0166) 0.7357 (0.0173) −0.9672 (0.0278) −0.1369 (0.0021) 0.1215 (0.0146) −0.6715 (0.0161) 0.9381 (0.0167) −1.1629 (0.0277) −0.2028 (0.0021) 0.0875 (0.0137) 0.0039 (0.0146) 0.6995 (0.0159) −0.5074 (0.0228) −0.1460 (0.0019) 0.2071 (0.016) −0.7003 (0.017) 0.7945 (0.018) −1.088 (0.029) −0.1751 (0.022) 0.1178 (0.013) −0.0959 (0.014) 0.5974 (0.015) −0.4533 (0.021) −0.1309 (0.001) −0.4981 −0.1037 −0.5928 −0.2355 −0.6794 −0.3896 −0.6673 −0.3049 −0.6271 −0.3824 −0.5319 −0.3735 −0.6205 −0.4711 −0.4726 −0.3676 −0.2403 −0.2779 (0.0281) (0.0321) (0.0261) (0.0289) (0.0222) (0.0244) (0.0203) (0.0215) (0.0247) (0.0255) (0.0210) (0.0214) (0.0177) (0.0184) (0.0175) (0.0164) (0.018) (0.016) −0.3758 (0.0348) (0.0303) 0.4903 −0.0402 (0.0215) (0.0212) 148,603 −0.3323 −0.2146 −0.0900 (0.0442) (0.0507) 1.5875 0.3264 (0.0327) (0.0385) 47,350 0.000 0.0868 −0.2715 −0.2748 (0.0455) (0.0505) 1.1071 0.2064 (0.0297) (0.0338) 55,945 0.000 0.0758 −0.2439 (0.0401) (0.0428) 0.7981 0.0631 (0.0259) (0.0291) 77,428 −0.2970 0.000 0.0707 −0.3005 −0.1596 (0.0362) (0.0374) 0.6504 −0.0738 (0.0227) (0.0252) 98,086 0.000 0.0697 −0.2742 −0.2542 (0.0452) (0.0463) 0.5097 −0.0852 (0.0282) (0.0304) 72,663 0.000 0.0748 −0.3493 −0.2372 (0.0399) (0.0388) 0.3107 −0.1978 (0.0242) (0.0256) 104,607 0.000 0.0661 −0.4262 −0.2224 (0.0366) (0.0345) 0.4091 −0.1054 (0.0214) (0.0227) 142,979 0.000 0.0675 −0.4541 0.000 0.0639 −0.3765 (0.037) (0.029) −0.2909 −0.3813 (0.023) (0.020) 162496 0.000 0.0480 Note: Standard errors are given in parentheses. Other results not shown here refer to variables representing additional categories for age, schooling levels, and marital status. The constant refers to urban, married men, between 40 and 65 years of age, and having eight years of education completed. Downloaded By: [Loyola University] At: 18:30 4 September 2009 APPENDIX 4 Selected Multinomial Results for Health Plan Coverage (Base Category: ISAPRE) 1987 Variable FONASA Indigente 3.0420 2.0469 (0.0531) (0.0504) 1.4339 1.0874 (0.0520) (0.0474) Female 0.0972 0.0153 (0.0352) (0.0322) Rural 2.0635 1.7056 (0.0694) (0.0679) Age 20 to 39 0.3523 −0.1126 (0.0493) (0.0444) Age 66 and 0.7756 1.3330 over (0.1254) (0.1194) Schooling 5 0.6254 0.4790 to 7 (0.0876) (0.0839) Schooling −1.1604 −0.5992 12 (0.0755) (0.0818) More than −11–.4878 −00–.9482 12 years (0.0761) (0.0696) schooling Single, 1.4474 0.6149 separated, (0.0474) (0.0440) divorced Constant −00–.6317 1.1678 (0.0749) (0.0682) Number 60,261 66,882 Observ Prob>Chi2 0.000 0.000 Pseudo R2 0.1406 0.1446 2.3132 (0.0367) 1.3644 (0.0389) 0.1262 (0.0274) 1.4394 (0.0369) 0.2044 (0.0366) 0.7936 (0.0814) 0.4611 (0.0666) −1.4049 (0.0607) −22–.3802 (0.0654) Poor Almost Poor Indigent 1990 1992 FONASA 128 1.4418 2.0774 (0.0337) (0.0290) 1.0275 1.1639 (0.0344) (0.0305) 0.0808 0.1822 (0.0242) (0.0222) 0.7753 1.5796 (0.0348) (0.0283) −0.1558 0.2773 (0.0313) (0.0298) 1.1359 0.6844 (0.0751) (0.0609) 0.2373 0.4713 (0.0636) (0.0491) −0.7856 −1.3817 (0.0545) (0.0462) −11–.4370 −22–.5566 (0.0543) (0.0588) 0.9821 (0.0355) 0.2761 (0.0315) (0.0604) 90,363 0.000 0.1546 −00–.5767 Indigente 1994 FONASA 1.2857 2.0255 (0.0267) (0.0256) 0.8384 1.1685 (0.0270) (0.0265) 0.0896 0.1965 (0.0196) (0.0191) 0.9673 1.6686 (0.0268) (0.0240) −0.1845 0.1218 (0.0254) (0.0258) 1.0884 1.1160 (0.0533) (0.0556) 0.2310 0.3916 (0.0467) (0.0436) −0.7131 −1.3240 (0.0408) (0.0408) −11–.3855 −22–.5298 (0.0422) (0.0468) 0.8748 (0.0288) 0.2625 (0.0256) 0.9749 (0.0544) 120,186 (0.0460) 87,072 0.000 0.1599 0.000 0.1757 −00–.9037 Indigente 1996 FONASA 1.1203 2.3955 (0.0247) (0.0337) 0.8265 1.3131 (0.0248) (0.0317) 0.1338 0.3318 (0.0177) (0.0227) 0.9773 1.8249 (0.0233) (0.0320) −0.2672 0.1928 (0.0231) (0.0300) 1.2806 1.2342 (0.0529) (0.0628) 0.2712 0.4157 (0.0427) (0.0529) −0.7078 −1.5099 (0.0382) (0.0481) −11–.4157 −22–.5528 (0.0392) (0.0549) 1.0360 (0.0250) 0.2996 (0.0233) 0.5422 (0.0409) 123,391 (0.0405) 223,799 0.5399 (0.0380) 234,003 0.000 0.1756 0.000 0.1688 0.000 0.1638 −00–.5291 Indigente 0.6556 (0.0288) −00–.6800 (0.0474) 249982 FONASA 1998 Indigente 1.3879 2.6829 (0.0319) (0.0335) 0.8851 1.4499 (0.0285) (0.0283) 0.1830 0.3701 (0.0197) (0.0197) 0.8958 1.6100 (0.0308) (0.0259) −0.1740 0.3243 (0.0251) (0.0258) 1.2699 0.9755 (0.0584) (0.0540) 0.2143 0.4911 (0.0503) (0.0469) −0.8274 −1.4708 (0.0427) (0.0411) −11–.5466 −22–.8845 (0.0438) (0.0488) 0.1203 (0.0248) 0.7430 (0.0423) FONASA Indigente 1.4468 3.2955 (0.0325) (0.0295) 0.8464 1.9117 (0.0261) (0.0247) 0.1833 0.3065 (0.0172) (0.0160) 0.7960 1.9272 (0.0246) (0.0194) 0.0406 −0.1604 (0.0217) (0.0207) 1.1295 0.9297 (0.0501) (0.0513) 0.3272 0.5565 (0.0448) (0.0483) −0.7513 −1.3890 (0.0371) (0.0404) −11–.6362 −22–.0974 (0.0380) (0.0402) 0.7304 (0.0251) 0.1050 (0.0218) (0.0406) 0.8753 (0.0366) −00–.5692 2000 FONASA 2003 Indigente 1.8394 3.4023 (0.0291) (0.0359) 1.3383 2.0736 (0.0235) (0.0269) 0.1038 0.2562 (0.0147) (0.0164) 0.9795 1.7023 (0.0186) (0.0209) −0.2059 −0.0268 (0.0184) (0.0209) 0.9830 0.2502 (0.0492) (0.0491) 0.3413 0.4791 (0.0469) (0.0557) −0.8012 −1.4549 (0.0375) (0.0442) −11–.6668 −22–.5882 (0.0373) (0.0439) FONASA 2006 Indigente 1.9759 2.906 (0.0357) (0.398) 1.4659 2.142 (0.0263) (0.0322) 0.1238 0.5398 (0.0152) (0.015) 0.7498 1.4950 (0.0204) (0.020) −0.1543 −0.0856 (0.0189) (0.020) 0.5087 0.4918 (0.0468) (0.048) 0.2664 0.3114 (0.0547) (0.058) −0.8792 −1.537 (0.0424) (0.045) −11–.9568 −22–.754 (0.0418) (0.045) FONASA 1.4115 (0.0400) 1.4777 (0.031) 0.1369 (0.015) 0.7128 (0.019) −0.0908 (0.019) 0.4805 (0.046) 0.0641 (0.057) −0.9650 (0.044) −22–.0339 (0.043) 1.1181 (0.0215) 0.3609 (0.0192) 1.1236 (0.0217) 0.3807 (0.0197) 0.2335 (0.065) 0.3469 (0.063) (0.0393) 1.2592 (0.0368) 0.5245 (0.0426) 1.7341 (0.0410) 1.0666 (0.044) 2.1975 (0.043) −00–.2035 0.000 0.1366 Note: The indigent plan refers to health care services received under the indigent modality, that is free of charge. FONASA refers to being covered by the public health care plan. ISAPRE refers to being covered by a private pre-paid health care plan. Standard errors are given in parentheses. Other results not shown here refer to variables representing additional categories for age, schooling levels, and marital status. The constant refers to urban, married men,between 40 and 65 years of age, and having eight years of education completed. Downloaded By: [Loyola University] At: 18:30 4 September 2009 APPENDIX 5 Selected Multinomial Results for Pension Plan Coverage (Base Category: AFP) 1987 Variable Poor Almost Poor Female Rural Age 40 to 65 129 Age 66 and over Schooling 5 to 7 Schooling 12 More thab 12 years of schooling Single, separated, divorced Constant Nunmber Observ Prob>chi2 Pseudo R2 No pension plan 1992 INP No pension plan 0.4162 (0.0218) 0.1610 (0.0271) 1.4006 (0.0198) 0.2501 (0.0231) −0.0651 (0.0272) 1.6373 (0.1006) 0.1651 (0.0393) −0.6299 (0.0409) −1.2981 (0.0364) 0.0868 (0.0334) 0.1323 (0.0396) 0.1337 (0.0307) −0.0219 (0.0342) 1.5316 (0.0402) 4.3926 (0.1028) 0.3528 (0.0548) −0.8594 (0.0780) −1.3625 (0.0611) 0.5538 (0.0218) 0.2581 (0.0368) −0.0282 −1.7497 (0.0387) (0.0603) 72.147 0.000 0.2006 1994 INP No pension plan 0.7806 (0.0185) 0.3510 (0.0208) 2.3477 (0.0169) 0.2271 (0.0173) −0.5039 (0.0198) 0.6953 (0.0413) 0.1569 (0.0299) −0.2271 (0.0308) −0.6220 (0.0344) 0.2603 (0.0382) 0.1668 (0.0402) 0.8954 (0.0323) −0.3237 (0.0340) 2.3007 (0.0568) 5.0200 (0.0640) 0.2472 (0.0654) −0.4159 (0.0761) −0.7949 (0.0882) 0.7205 (0.0175) 0.6235 (0.0404) −2.2583 −5.0666 (0.0316) (0.0807) 107.504 0.000 0.2967 1996 1998 INP No pension plan INP No pension plan 0.4994 (0.0165) 0.1411 (0.0182) 1.3628 (0.0139) 0.4277 (0.0149) 0.0008 (0.0172) 1.2837 (0.0427) 0.2523 (0.0256) −0.6324 (0.0262) −0.9988 (0.0287) 0.0076 (0.0298) −0.0132 (0.0309) 0.1987 (0.0243) 0.2039 (0.0250) 2.3501 (0.0381) 4.6447 (0.0537) 0.4203 (0.0502) −0.4714 (0.0575) −0.7647 (0.0622) 0.6499 (0.0186) 0.2679 (0.0199) 1.1775 (0.0151) 0.5318 (0.0180) −0.0544 (0.0191) 1.1383 (0.0459) 0.2721 (0.0298) −0.5019 (0.0290) 0.0060 (0.0286) 0.1334 (0.0356) −0.0142 (0.0366) 0.1110 (0.0274) −0.1001 ( −0.0321) 2.6706 (0.0473) 4.9376 (0.0623) 0.3945 (0.0548) −0.5467 (0.0613) −0.6264 (0.0660) 0.7798 (0.0163) 0.3775 (0.0169) 1.1659 (0.0127) 0.5400 (0.0145) −0.1311 (0.0159) 1.1030 (0.0377) 0.2595 (0.0248) −0.4477 (0.0239) 0.0801 (0.0240) 0.7618 (0.0155) 0.5665 (0.0307) 1.0146 (0.0168) 0.7771 (0.0348) 1.1392 (0.0143) −0.8464 −3.6584 (0.0259) (0.0578) 133.533 0.000 0.2104 −1.0970 −3.8790 (0.0285) (0.0661) 100.838 0.000 0.1909 −1.2501 2003 INP No pension plan (0.0332) −0.0710 (0.0323) 0.1381 (0.0237) −0.0579 (0.0263) 3.0312 (0.0496) 5.4227 (0.0593) 0.4481 (0.0468) −0.5703 (0.0540) −0.6205 (0.0595) 0.4260 (0.0159) 0.1072 (0.0155) 1.3609 (0.0127) 0.3138 (0.0133) −0.0175 (0.0152) 1.1989 (0.0369) 0.4102 (0.0237) −0.5405 (0.0223) −1.8015 (0.0237) 0.9099 (0.0304) 0.0076 (0.0146) −0.0239 −4.5090 (0.0238) (0.0638) 142.553 0.000 0.2107 −0.7034 2006 INP No pension plan INP (0.0585) −0.2960 (0.0468) 0.1127 (0.0362) −0.4258 (0.0393) 7.3146 (0.7079) 9.3704 (0.7092) 0.5512 (0.0676) −0.4576 (0.0772) −1.1004 (0.0886) 1.0775 (0.021) 0.5142 (0.016) 1.5651 (0.013) 0.4466 (0.013) −0.1185 (0.015) 1.3546 (0.034) 0.4470 (0.023) −0.6129 (0.022) −0.5667 (0.024) 0.0512 (0.063) −0.1978 (0.047) 0.2949 (0.033) −0.2039 (0.034) 4.864 (0.025) 7.1974 (0.025) 0.5526 (0.062) −0.4467 (0.071) −0.6332 (0.055) 0.1492 (0.0461) 0.3560 (0.014) 0.2777 (0.042) −0.4985 −9.4503 (0.0228) (0.7106) 214,463 0.000 0.4222 −1.2330 −7.498 (0.023) (0.025) 155399 0.000 0.2610 Note: No pension plan refers to people who lack social security coverage. INP refers to people covered by the public pay-as-you-go pension scheme. AFP refers to the social security coverage under the private individual capitalization system. Standard errors are given in parentheses. Other results not shown here refer to variables representing additional categories for age, schooling levels, and marital status. The constant refers to urban, married men, between 40 and 65 years of age, and having eight years of education completed.