• https://publications.iadb.org/en/subsidizing-informality-non-contributory-public-spending-latin-america-and-caribbean

Izquierdo, Alejandro, et al. (2019). Non-contributory Public Spending in Latin America and the Caribbean Data: 2010-2015. IDB Open Data. https://doi.org/10.60966/g43r-pn41

1. English

Social program

What is this dataset about?

This dataset compiles comparable data on non-contributory public spending across 16 countries in Latin America and the Caribbean (LAC).
It documents how governments finance and deliver benefits to informal and vulnerable populations outside traditional contributory programs, such as social security and formal pensions.

What are non-contributory programs?

Non-contributory programs provide benefits — such as pensions, health coverage, or social assistance — to individuals who do not contribute through payroll or formal social security systems.
They are financed primarily through general government revenues, complementing traditional contributory data on formal-sector social insurance.

What kind of information does the dataset include?

The dataset includes detailed, harmonized information on:

• Public spending levels on non-contributory programs (as a share of GDP)
• Program type and coverage by population group
• Funding source (general revenues vs. contribution-based systems)
• Country and year observations for 16 LAC nations
• Comparability metadata, with standardized definitions and methods

How does this relate to contributory data?

This dataset complements existing contributory data on formal social protection by showing how governments extend benefits beyond formal employment systems.
It enables researchers to assess how non-contributory programs fill coverage gaps and how these policies interact with informality and fiscal spending patterns.

Which countries are covered?

The dataset includes information for the following 16 Latin American and Caribbean countries:

Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, and Peru.

What is the time period covered?

Coverage varies by country but generally spans the late 1990s through the early 2020s, depending on data availability from national ministries of finance and social protection agencies.

Who developed this dataset?

The dataset was developed by Alejandro Izquierdo and Mónica Altamirano Montoya of the Inter-American Development Bank (IDB) as part of the Bank’s work on fiscal policy, social protection, and informality.

How can this dataset be used?

Researchers, policymakers, and economists can use this dataset to:

• Analyze public spending trends in non-contributory programs
• Compare fiscal commitments across LAC countries
• Assess how non-contributory spending interacts with informal labor dynamics
• Complement contributory program data to evaluate full-system social protection coverage

What is the main contribution of this dataset?

This is the first harmonized regional database to document the “subsidy to informality” across LAC countries.
It applies a consistent methodology to quantify how much governments spend on non-contributory programs that benefit informal workers — an essential input for fiscal sustainability and equity analysis.

What is a contributory program in social security?

Contributory programs are social insurance schemes where salaried formal workers pay into social security systems through payroll taxes. In return, they gain access to benefits such as old-age pensions and healthcare. The dataset contrasts these with non-contributory programs, which are financed through general revenues and target informal workers.

What is the meaning of contributory vs non-contributory benefits?

Contributory benefits are earned rights tied to worker contributions (e.g., pensions funded by payroll taxes).

Non-contributory benefits, documented in the dataset, are financed by government revenues and extended to informal workers without requiring contributions. For example, Argentina’s Pensiones no contributivas a la vejez are non-contributory pensions.

How do contributory social insurance programs work?

They operate by collecting contributions from formal employees and employers, pooling funds to finance benefits. The dataset notes that formal workers contribute to social security and receive pensions and health services, while informal workers rely on tax-funded non-contributory programs.

Are unemployment benefits considered contributory programs?

The dataset includes Programa Jefas y Jefes de Hogar in Argentina and Programa de Empleo Temporal in Colombia, both active labor market policies. These are non-contributory, tax-funded programs for informal workers. By contrast, contributory unemployment insurance schemes (not detailed in this dataset) require payroll contributions.

What are the advantages and disadvantages of contributory social programs?

• Advantages: Stronger fiscal sustainability, benefits tied to contributions, and reduced stigma (seen as earned rights).
• Disadvantages: Exclude informal workers, leaving gaps in coverage. The dataset highlights that non-contributory programs emerged to fill this gap, but at the cost of incentivizing informality.

What is the difference between contributory healthcare models vs universal healthcare?

The dataset documents the Atención Pública de la Salud (Argentina) and the Régimen subsidiado de salud (Colombia), both non-contributory health programs. By contrast, contributory healthcare models are funded by payroll contributions and cover formal workers. Universal tax-funded systems resemble the non-contributory approach but extend coverage to all citizens.

How do contributory programs differ from non-contributory or means-tested social assistance?

Contributory programs are funded by payroll taxes and linked to employment status. Non-contributory programs, documented extensively in the dataset, are financed by general revenues and target informal workers. For example, Mexico’s Seguro Popular was a non-contributory health program for those outside formal employment.

The 'earned right' philosophy: Why are contributory programs often more politically stable?

The dataset notes that contributory programs are tied to formal employment and contributions, making them politically stable as “earned rights.” Non-contributory programs, while socially necessary, risk incentivizing informality and are more vulnerable to fiscal pressures.

What are the roles of contributory programs in reducing the social stigma of receiving benefits?

The dataset suggests that contributory programs are viewed as earned rights, whereas non-contributory programs may be perceived as subsidies. This distinction affects political stability and social acceptance.