ENTER Seminar - Chiara Malavasi (Mannheim)

Abstract: We estimate the effect of additional pension benefits on mortality outcomes by examining a German pension subsidy program. Exploring the two eligibility criteria and a Difference-in-Differences method, we show a negative and significant effect on the probability of dying before 65, 70 and 75. Using an Instrumental Variable approach, we show that a 100€ increase of monthly pension income decreases the probability of dying before 65 by 1.8 percentage points (equivalent to a relative decrease of 35%), the probability of dying before 70 by 2.9 percentage points (equivalent to a relative decrease of 11%) and the probability of dying before 75 by 1.6 percentage points (equivalent to a relative decrease of 3%). Analysis on health measures suggests that additional income helps improve both mental and physical health. Furthermore, individuals feel less financially constrained and are more optimistic about their future and opportunities. Heterogeneity analysis suggests results are mostly driven by men.

Location: 321 Drayton House.