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The Effects of Old-Age Public Transfer on the Well-Being of Older Adults: The Case of Social Pension in South Korea

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  • Seungho LeeMA
  • Inhoe KuPhD
  • Byongdon ShonPhD

Abstract

ObjectivesThis study examines the effects of the social pension reform on the well-being of older adults in Korea. Our study provides an estimate of the impacts of social pension in an industrialized and urbanized context.MethodsWe use monthly panel data from the Household Income and Expenditure Survey of the Korea Statistical Office. We identify the effects of social pension by utilizing an exogenous variation in the benefit level generated by the reform in 2014. We apply a triple-differences approach to remove potential selection biases related to program participation.ResultsThe higher benefit increases gross income. It does not decrease primary income and private transfer income. It increases consumption and reduces poverty significantly.DiscussionOur findings contrast with those from the literature. The Korean literature fails to find positive effects on the well-being of older persons. The literature of other countries finds negative incentive effects. The discrepancy may result from differences in methodological approaches and social and cultural contexts and institutional characteristics of the social pension.

Suggested Citation

  • Seungho LeeMA & Inhoe KuPhD & Byongdon ShonPhD, 2019. "The Effects of Old-Age Public Transfer on the Well-Being of Older Adults: The Case of Social Pension in South Korea," The Journals of Gerontology: Series B, The Gerontological Society of America, vol. 74(3), pages 506-515.
    • Handle: RePEc:oup:geronb:v:74:y:2019:i:3:p:506-515.
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    Cited by:

    1. Hwang, Inuk & Lee, Tae-Jin, 2022. "Health improvements of older adults based on benefit duration: Lessons from Korean social pension policies," Social Science & Medicine, Elsevier, vol. 315(C).
    2. Zhu, Alex Yue Feng & Ku, Inhoe & Chan, Wai Sum & Chou, Kee Lee, 2023. "Social pension reform and poverty among older people in Hong Kong: Triple difference estimations," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 105(C).
    3. 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).

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