Casual Friday Development Seminar - Brown Bag Seminar

Du 21/09/2018 de 12:45 à 13:45

NAVARRETE H. Nicolas (Paris School of Economics )

Money can buy me life. The Effect of a Basic Pension on Mortality: a Regression Discontinuity Design

We estimate the effect of a permanent income increase for poor elderly on their health outcomes. Our regression discontinuity design exploits an eligibility cutoff in a Chilean basic pension program that grants monthly payments of 40 percent of the minimum wage to pensionless retirees. Four years after applying, pension recipients are 2.5 percentage points less likely to die. Effects are concentrated on pension recipients living without working-age relatives, who in turn have more children. This seems explained by pre-existing income transfers from working-age relatives to retirees, which cease when payments begin. Results suggest that increasing income for older individuals reduce health inequalities across income groups, and mitigate the intergenerational transmission of poverty by alleviating the financial burden on younger relatives.