Influence of social pension on well‐being and health of the rural elderly: the case of South Korea

This study examines whether a social pension for the elderly population affects the well‐being and health of older adults in rural areas and whether pensions are more effective in rural areas than in urban areas. Using data from the Korean Longitudinal Study of Ageing, we exploit a difference‐in‐difference specification that compares changes in well‐being and health in rural areas for those who are 65 or older relative to the younger population before and after a pension reform. We also consider a triple‐difference specification to investigate the rural–urban difference. The results reveal that the expansion of the social pension significantly improved cognitive function and alleviated depressive symptoms among the rural elderly, but it had little impact on well‐being or other health measures such as subjective health status. We also find that this impact has been more effective in rural than in urban areas. Our findings suggest that social pensions can be crucial in enhancing cognitive functioning and mental health for rural elderly individuals and emphasise the effectiveness of pensions for rural elderly populations.