Do Income Transfers for the Old Improve Health? The Impact of a Non-Contributory Pension Programme on Old-Age Health in Colombia

Philipp Hessel, Harvard University
Jose Rubio, London School of Economics and Political Science (LSE)
Mauricio Avendano, London School of Economics and Political Science (LSE)

Non-contributory pension programmes are a major social protection mechanism to alleviate poverty in old age. We examine the health impact of Adulto Mayor, a major program that provides cash transfers to old individuals living in poverty in Colombia, and benefits more than a million individuals. Based on data from the most recent Demographic Health Survey covering 19,000 old respondents, we use a “fuzzy” regression discontinuity design that exploits discrete thresholds for program eligibility on a household poverty index. We find strong evidence that municipality thresholds for programme eligibility increase the probability of enrolling into the program. However, we find little evidence that the programme has any beneficial effect on the physical or mental health of older beneficiaries. Our study has implications for understanding the causal relationship between income and health in old age and for the development of social protection programmes for the old in low- and middle-income countries.