No.199 Barriers to Public Pension Program Participation in a Developing Country

Increasing public pension participation rates in developing countries is an important policy objective. We study three possible constraints to such participation by using a randomized control trial and the administrative records covering about 40 percent of Mongolian subdistricts. We find that providing information about subsidiary monetary benefits (survivors’ and disability pensions) does not increase participation significantly. However, providing information about the mobile phone payment of pension funds and dispatching experts to a pension administrative agency from a foreign aid agency both increase payments. These results imply that perceived transaction costs and trust affect demand for pension services. They also suggest that foreign aid can affect citizens’participation in public services by changing their perception of these services.

Keywords: Randomized Control Trial, Pension, Mobile Phones, Foreign Aid, Information Provision, Mongolia