Intergenerational effects of old-age pension on children's health and well-being.

Abstract

This study estimates the impacts of the basic old-age pension reform in South Korea on childhood/adolescent health and well-being. Facing a rapidly aging population and the increasing demand for social security for the elderly, the government introduced the basic pension program in 2007, which covered 70% of citizens 65 years or older. Information is obtained from a nationally representative panel of school-aged children from 2006 to 2012. A difference-in-differences approach exploiting within-person variation in exposure to the old-age pension program is used. The unconditional cash transfers for the elderly have substantial impacts on the health of grandchildren. In particular, there is gender-specific differential impacts. While grandmothers' pensions have positive impacts on granddaughters' heights and drinking participation, grandfathers' pension incomes lower smoking participation of grandsons. Results suggest that grandmothers and grandfathers put their resources for their grandchildren in a different way. It also indicates that household is not a unitary entity.