Microeconomic research generally assumes that workers are able to determine and follow optimal saving and retirement paths, and that to this end they have all the information necessary regarding the pension plan rules covering them. For instance, labor supply and saving outcomes at older ages are conventionally modeled by economists as depending on specific Social Security benefit and tax incentives that impart important notches and kinks in workers’ lifetime budget constraints.

Rising life expectancy and falling fertility rates are leading to marked increases in the proportion of elderly persons worldwide. This phenomenon has received relatively little attention in many developing countries despite the fact that the proportion of the elderly in developing countries is predicted to treble by 2050. This increase coincides with slow progress in many developing countries in addressing poor levels of nutrition, schooling and health amongst young people.