Health Effects of Increasing Income for the Elderly: Evidence from a Chilean Pension Program

Abstract

We estimate the effect of a permanent income increase on the health outcomes of the elderly poor. Our regression discontinuity design exploits an eligibility cutoff in a Chilean basic pension program that grants monthly payments to retirees without a contributory pension. Using administrative data, we find that four years after applying, basic pension recipients are 2.7 percentage points less likely to have died. Survey evidence suggests an increase in food consumption and visits to health centers as relevant drivers of the mortality reduction. (JEL D63, G51, I12, I14, I38, J14, O15)