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What are the effects of expanding social pension on health? Evidence from the Basic Pension in South Korea

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  • Pak, Tae-Young

Abstract

Non-contributory social pension has been widely used to provide minimum income support for disadvantaged seniors. Despite its efficacy in reducing old-age poverty, only a few studies systematically assessed whether the benefits of social pension extend to health outcomes. In this paper, we exploit a reform to the South Korean social pension in 2014 to provide evidence on the health effects of expanding social pension. Using data from the Korean Longitudinal Study of Aging, we estimate a series of difference-in-differences models that compare changes in health of individuals age-eligible for the social pension (age ≥ 65) to those younger than the minimum qualification age (age < 65), before and after the reform in 2014. The estimates show an average of 8.1–9.0% reductions in the count of depressive symptoms attributable to the reform. We also find that the mental health benefit comes primarily from beneficiaries being more satisfied with their financial condition and overall quality of life. However, despite the large increase in income there were no significant improvements in grip strength and self-rated health. Overall, this study highlights the importance of social pension as a means of protecting mental health of disadvantaged seniors.

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  • Pak, Tae-Young, 2021. "What are the effects of expanding social pension on health? Evidence from the Basic Pension in South Korea," The Journal of the Economics of Ageing, Elsevier, vol. 18(C).
    • Handle: RePEc:eee:joecag:v:18:y:2021:i:c:s2212828x20300529
    DOI: 10.1016/j.jeoa.2020.100287
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    Cited by:

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    2. Clemente Ávila‐Parra & David Escamilla‐Guerrero & Oscar Gálvez‐Soriano, 2024. "Minimum eligibility age for social pensions and household poverty: Evidence from Mexico," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 175-196, January.
    3. Myong Sun Cho & Mi Young Kwon, 2023. "Factors Associated with Aging in Place among Community-Dwelling Older Adults in Korea: Findings from a National Survey," IJERPH, MDPI, vol. 20(3), pages 1-14, February.
    4. Sipei Xu & Jia Zhang, 2022. "Do Social Pensions Affect the Physical and Mental Health of Rural Children in China? An Intergenerational Care Perspective," IJERPH, MDPI, vol. 19(7), pages 1-25, March.
    5. Riumallo Herl, Carlos & Kabudula, Chodziwadziwa & Kahn, Kathleen & Tollman, Stephen & Canning, David, 2022. "Pension exposure and health: Evidence from a longitudinal study in South Africa," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    6. Xiaocang Xu & Haoran Yang, 2022. "Elderly chronic diseases and catastrophic health expenditure: an important cause of Borderline Poor Families’ return to poverty in rural China," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-10, December.

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    More about this item

    Keywords

    Old-age poverty; Non-contributory pension; Depression; Financial satisfaction; South Korea;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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