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INTRODUCTION

Practical solutions to enhance income security for older adults


Low- and middle-income countries (LMICs) are aging 2.5 times faster than high-income nations — creating urgent challenges and unprecedented economic opportunities for governments and communities worldwide.

By 2050, LMICs will be home to 80% of the world's adults over 65, with older women facing 15% higher poverty rates while living nearly four years longer than men. These demographic shifts demand practical solutions to enhance income security and capture the $118 trillion older adults will contribute to the global economy by 2050. Investing strategically in aging populations drives inclusive economic growth, reduces poverty, and creates cross-generational opportunities.

AARP's ARC 5.0 Insights Brief, with analysis by Economist Impact, provides quantitative evidence on effective programs and their broader economic impacts, offering policymakers actionable insights to transform demographic challenges into opportunities for sustainable, equitable development.

Download the full Insights Brief Download Methodology Note

Explore Key Findings
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KEY FINDINGS

Our analysis reveals critical drivers of healthy aging that can help countries prepare for demographic shifts while improving lives today.

A 5% annual GDP 
per capita increase

is associated with 15 days of healthy
life expectancy at age 60.

Investing in
healthcare access
and delivery policies

leads to better outcomes for
older adults — even with lower
overall spending.

Middle-income countries like Costa Rica, Thailand, and Ecuador 

outperform peers by over three years
of healthy life expectancy through
strategic investments in healthcare
accessibility and delivery.

50+ population contribute
By 2050, older adults will contribute $118 trillion

to the global economy; LMICs need proactive policies to capture this economic opportunity.

The gender income security gap

Nearly 50% more older women in high-income countries — and 15% more in LMICs — live in poverty compared to men.
Women's income security is compromised by discrimination, unpaid caregiving responsibilities (valued at 10-39% of global GDP), and lower formal employment.
In LMICs, less than 10% of working-age women are covered by pension schemes, compared to 20% of men.
Despite older women making up most of the global population living in relatively poor households, almost no policy interventions specifically target older women's needs.
Social pensions and targeted, gender-specific interventions can offer solutions to help address these disparities.

SOLUTIONS

Evidence-based solutions for income security

The proven benefits of social pensions

Economic Benefits

Studies show social pensions reduce poverty rates and increase assets with minimal impact on labor force participation.

Health Improvements

Social pensions significantly improve mental health outcomes, reduce depression rates, and increase food security among older beneficiaries.

Social Participation

Recipients report enhanced social engagement and reduced isolation, particularly important for older women who often face exclusion.

 

Financial Education

Programs targeting older women compound the positive effects of social pensions, providing tools for informed financial decisions.

 

The economic returns of investing in older adults

Strategic investments that pay dividends

Social pensions and targeted aging programs aren't just social welfare — they're smart economic investments with measurable returns. These programs create multiplier effects through increased consumption, reduced healthcare costs, and enhanced productivity across generations.

Social Pension Returns
Without South Africa's Old-Age Grant program, the country’s GDP would have been at least $3.8 billion smaller  between 2017-2023 (excluding pandemic years).

 

Triple Dividend of Care Systems
Long-term care investments yield three benefits simultaneously: supporting older adults' needs, enabling family caregivers (primarily women) to join the workforce, and creating new care sector jobs.

 

Community Based Solutions
Programs like Brazil's Programa Maior Cuidado and Thailand's Community-Integrated Intermediary Care (CIIC) demonstrate how LMICs can develop cost-effective care models at just US $173 monthly per beneficiary.

"Countries that act now can leverage demographic shifts to drive economic
development and improve the lives of millions."

Download the full insights brief

Explore Country Spotlights below
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Global Exemplars in Age-Responsive Policies and Programs

Innovative approaches to closing the gender income security gap
Bangladesh
Case Study
Bangladesh's Old Widow's Program stands out as one of the only large-scale poverty-alleviation schemes specifically targeting older women in LMICs. This groundbreaking initiative addresses a critical gap in global development efforts by recognizing the unique vulnerabilities of older women who face compounded disadvantages from gender discrimination and age-related challenges.
Subjects
Brazil
Case Study
Brazil's Programa Maior Cuidado provides cost-effective community-based care for older adults at approximately US$173 monthly per beneficiary, significantly lower than institutional alternatives. The program has supported over 3,000 families since 2011, demonstrating how LMICs can develop sustainable care models that improve health outcomes while creating employment opportunities in communities.
Subjects
Costa Rica
Case Study
Costa Rica has emerged as a regional leader in healthy aging by prioritizing healthcare accessibility and integrating older adults' needs into national policymaking processes. These strategic health system investments have yielded remarkable results, with Costa Ricans enjoying three additional years of healthy life expectancy compared to countries with similar GDP levels.
Subjects
Ecuador
Case Study
Ecuador has achieved remarkable health outcomes for older adults through strategic investments in healthcare accessibility, affordability, and quality. Despite similar GDP levels to regional peers, Ecuador outperforms in healthy life expectancy metrics by removing barriers to healthcare access and ensuring services meet the specific needs of older populations.
Subjects
Mexico
Case Study
Mexico's recently launched Pensión Mujeres Bienestar enhances economic security for women aged 60-64, beginning with indigenous and Afro-Mexican communities before expanding nationwide by 2026. This targeted approach acknowledges the gender income gap in aging and demonstrates how countries can phase in social protection programs to reach the most vulnerable populations first.
Subjects
South Africa
Case Study
South Africa's pioneering Old-Age Grant Programme delivers economic benefits beyond its social impact, with every rand invested yielding 1.4 rand back to the economy. The program reaches nearly 75% of South Africans aged 60+, with women comprising nearly two-thirds of beneficiaries, demonstrating effective targeting of those most vulnerable to old-age poverty.
Subjects
   Thailand
Case Study
Thailand's Community-Integrated Intermediary Care program represents an innovative approach to long-term care that combines formal and informal support through community-based facilities. This strategic investment has helped Thailand outperform economic peers by over three years in healthy life expectancy metrics, creating a model for other middle-income countries.

Suggested citation:
Economist Impact, 2025; Closing the Gender Income Security Gap for Older Adults in Low- and Middle- Income Countries:
An Aging Readiness and Competitiveness Initiative 5.0 Insights Brief; AARP International; Washington, D.C. 
https://doi.org/10.26419/int.00351.001

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