Minimum Pensions and Regional Income Redistribution in Spain

One of the instruments used to combat poverty among the elderly is the minimum pension. In Spain, minimum pension is yearly set by government and has a positive effect on income redistribution between regions. In this contribution we analyze and quantify such redistribution. Results show that pensions in regions with low per capita income draw higher amount of supplement than regions with high per capita income. In short, the positive effect of the minimum pension on the income redistribution of the retired population is associated with a relative pension benefit improvement for pensioners in poor regions (above the national average).