Micro pensions in developing countries: a case study of the Solomon Islands

Wouter de Jong; Caroline van Dullemen

doi:10.3362/1755-1986.19-00009

Micro pensions in developing countries: a case study of the Solomon Islands

In the traditional old-age scenario, grandparents lived among their extended family members, growing vegetables and taking care of the grandchildren. Today this is no longer evident. Due to modernization, urbanization, and migration, family support is becoming an increasingly demanding obligation, even in the Pacific. Therefore, the need for (micro) pension schemes is increasing. This study is conducted in the Solomon Islands, a low-income country in the South Pacific Ocean. It investigates the drivers behind the saving behaviour of the first group of participants in a micro pension pilot initiated by the Solomon Islands National Provident Fund (SINPF). The results show that the initial contribution needed for entering the micro pension scheme, the age of participants, and the occupation of participants are the main determinants of long-term saving. The results are based on empirical findings and can therefore be indicative of the determinants of informal saving in other countries with similar large informal sectors.

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