Social pension reform and poverty among older people in Hong Kong: Triple difference estimations

Abstract

Research calls for evidence from a strict experiment-based design to illustrate the effect of a social pension expansion on mitigating poverty among older adults in non-welfare regimes. This study utilized the introduction of a new higher tier of the Old Age Living Allowance (OALA) in Hong Kong in June 2018 as its experimental condition. It examined the impact of the higher OALA on economic activity, financial transfers from non-co-resident adult children, household income, household expenditure, income-based poverty, and expenditure-based poverty among Hong Kong's older adults. Supported by three waves of data collected in 2015, 2017, and 2019 from a sample, we designed a quasi-experiment and estimated the triple differences in the six outcome variables. The findings show that the higher OALA impacted the institutionalized life course by reducing financial transfers from non-co-resident adult children and significantly increased income-based and expenditure-based poverty. Findings reveal the crowding-out effect of the higher OALA and motivate a discussion of the nature of reduced financial transfers from non-co-resident adult children among older adults in Hong Kong.