Old age security and the defense of social norms

This paper identifies various kinds of risk and uncertainty observable in rural areas of developing countries and explains the relative importance of those pertaining to disability and old age. It compares the modern system (based on old age pensions and social security) for mitigating or coping with these risks with the traditional intrafamilial support mechanisms. The paper concludes that, when the traditional system is functioning smoothly, it can address these needs at far lower cost than the modern system. The efficiency and viability of the traditional system can be considerably enhanced by the presence of social norms, on the one hand, and of strategic instruments in the hands of household heads, on the other. Since both of these defenses are often undermined prematurely by modernizing influences, the paper identifies possible actions for avoiding or postponing the effects of such influences.