Advertisement

Government Transfers, Work, and Wellbeing: Evidence from the Russian Old-Age Pension

  • Louise Grogan
  • Fraser Summerfield
Original Paper
  • 41 Downloads

Abstract

This paper examines the impacts of a large and anticipated government transfer, the Russian old-age pension, on labor supply, home production, and subjective wellbeing. The discontinuity in eligibility at pension age is exploited for inference. The 2006–2011 Russian Longitudinal Monitoring Survey is employed. At pension age, women reduce market work and appear to increase home production. They report increased wellbeing. Men reduce labor supply without any apparent increase in wellbeing. Pension receipt does not impact household composition.

Keywords

Labor supply Pensions Subjective wellbeing Fuzzy regression discontinuity 

JEL Classification

I31 J22 J26 Z13 

Notes

Acknowledgment

The authors thank the Editor and two anonymous referees for very helpful suggestions. The authors are also grateful for comments from Mike Hoy, Xin Jin, Erzo Luttmer, Paul Oyer, Miana Plesca, John Skåtun, Casey Warman and participants of the 2015 Canadian Economics Association and Southern Economics Association annual meetings. We also thank seminar participants at Acadia University, Dalhousie University, the University of Aberdeen, University of Guelph, Lakehead University, University of Vermont, ZEW Mannheim and the Bank of Canada.

Compliance with Ethical Standards

Conflict of interest

The authors declare that they have no conflict of interest.

References

  1. Abadie A, Imbens GW (2006) Large sample properties of matching estimators for average treatment effects. Econometrica 74:235–267CrossRefGoogle Scholar
  2. Abeler J, Marklein F (2008) Fungibility, labels, and consumption. Discussion Paper 3500, IZAGoogle Scholar
  3. Alesina A, Giuliano P, Nunn N (2013) On the origins of gender roles: women and the plough. Q J Econ 128(2):469–530CrossRefGoogle Scholar
  4. Allcott H (2011) Social norms and energy conservation. J Public Econ 95(9):1082–1095CrossRefGoogle Scholar
  5. Anderson BA (1986) Work among Soviets of retirement age. Working paper of the Soviet Interview Project, University of IllinoisGoogle Scholar
  6. Bonsang E, Klein TJ (2012) Retirement and subjective well-being. J Econ Behav Organ 83(3):311–329CrossRefGoogle Scholar
  7. Brinch CN, Vestad OL, Zweimüller J (2015) Excess early retirement? Evidence from the Norwegian 2011 pension reform. MimeoGoogle Scholar
  8. Bussolo M, Schotte S, Matytsin M (2015) Population aging and households’ saving in the Russian Federation. Policy Research Working Paper 7443, The World BankGoogle Scholar
  9. Calonico S, Cattaneo M, Farrell MH, Titiunik R (2018) Regression discontinuity designs using covariates. Review of Economics and Statistics. forthcomingGoogle Scholar
  10. Calonico S, Cattaneo M, Titiunik R (2014) Robust nonparametric confidence intervals for regression-discontinuity designs. Econometrica 82(6):2295–2326CrossRefGoogle Scholar
  11. Campa P, Serafinelli M (2016) Politico-economic regimes and attitudes: female workers under state-socialism Working Paper 089, Centre for Research on Social Dynamics, Università Commerciale Luigi BocconiGoogle Scholar
  12. Cappelen AW, Moene KO, Sørensen EØ, Tungodden B (2013) Needs versus entitlements − an international fairness experiment. J Eur Econ Assoc 11(3):574–598CrossRefGoogle Scholar
  13. Case A, Deaton A (1998) Large cash transfers to the elderly in South Africa. Econ J 108(450):1330–1361CrossRefGoogle Scholar
  14. Case A, Deaton A (2015) Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century. Proc Natl Acad Sci U S A 112(49):15078–15083CrossRefGoogle Scholar
  15. Cattaneo MD, Jansson M, Ma X (2017) Simple local polynomial density estimators. Working paper, University of MichiganGoogle Scholar
  16. Cigno A, Casolaro L, Rosati FC (2003) The impact of social security on saving and fertility in Germany. FinanzArchiv 59(2):189–211CrossRefGoogle Scholar
  17. Cigno A, Komura M, Luporini A (2017) Self-enforcing family rules, marriage and the (non)neutrality of public intervention. J Popul Econ 30:805–834CrossRefGoogle Scholar
  18. Cigno A, Rosati FC (1996) Jointly determined saving and fertility behaviour: theory, and estimates from Germany, Italy, UK, and USA. Eur Econ Rev 40:1561–1589CrossRefGoogle Scholar
  19. Clark A (2003) Unemployment as a social norm: psychological evidence from panel data. J Labour Econ 21(2):323–351CrossRefGoogle Scholar
  20. Dal Bó E, Tervió M (2013) Self-esteem, moral capital, and wrongdoing. J Eur Econ Assoc 11(3):599–663CrossRefGoogle Scholar
  21. Danzer AM (2013) Benefit generosity and the income effect on labour supply: quasi-experimental evidence. Econ J 123:1059–1084CrossRefGoogle Scholar
  22. DellaVigna S, List J, Malmendier U (2012) Testing for altruism and social pressure in charitable giving. Q J Econ 127(1):1–56CrossRefGoogle Scholar
  23. Di Tella R, Macculloch R (2006) Some uses of happiness data in economics. J Econ Perspect 20(1):25–46CrossRefGoogle Scholar
  24. Dong Y (2018) Alternative assumptions to identify LATE in fuzzy regression discontinuity designs. Oxford Bulletin of Economics and Statistics, ForthcomingGoogle Scholar
  25. Duflo E (2003) Grandmothers and granddaughters: old-age pensions and intrahousehold allocation in South Africa. World Bank Econ Rev 17(1):1–25CrossRefGoogle Scholar
  26. Economist (2018) Back to work: Russia will raise pension ages that date back to Stalin. The Economist 427(9098)Google Scholar
  27. Edmonds EV (2004) Does illiquidity alter child labor and schooling decisions? Evidence from household responses to anticipated cash transfers in South Africa. Working Paper 10265, National Bureau of Economic ResearchGoogle Scholar
  28. Edmonds EV, Mammen K, Miller DL (2005) Rearranging the family? Income support and elderly living arrangements in a low-income country. J Hum Resour 40(1):186–207CrossRefGoogle Scholar
  29. Eich F, Soto M, Gust C (2012) Reforming the public pension system in the Russian Federation. Technical Report 12/201, International Monetary FundGoogle Scholar
  30. Ekerdt DJ (1986) The busy ethic: moral continuity between work and retirement. Gerontologist 26:239–244CrossRefGoogle Scholar
  31. Fellner G, Sausgruber R, Traxler C (2013) Testing enforcement strategies in the field: threat, moral appeal and social information. J Eur Econ Assoc 11(3):634–660CrossRefGoogle Scholar
  32. Ferraro PJ, Price MK (2013) Using nonpecuniary strategies to influence behavior: evidence from a large-scale field experiment. Rev Econ Stat 95(1):64–73CrossRefGoogle Scholar
  33. Fershtman C, Gneezy U, List JA (2012) Equity aversion: social norms and the desire to be ahead. American Economic Journal: Microeconomics 4(4):131–144Google Scholar
  34. Fischbacher U, Föllmi-Heusi F (2013) Lies in disguise − an experimental study on cheating. J Eur Econ Assoc 11(3):525–547CrossRefGoogle Scholar
  35. Gächter S, Nosenzo D, Sefton M (2013) Peer effects in pro-social behavior: social norms or social preferences? J Eur Econ Assoc 11(3):548–573CrossRefGoogle Scholar
  36. Giuliano P, Spilimbergo A (2014) Growing up in a recession. Rev Econ Stud 81:787–817CrossRefGoogle Scholar
  37. Gneezy U, Leibbrandt A, List JA (2016) Ode to the sea: workplace organizations and norms of cooperation. Econ J 125(595):1856–1883CrossRefGoogle Scholar
  38. Goldman SD (2003) Russian developments. In: Columbus FH (ed) Russia in transition, vol 1. Nova PublishersGoogle Scholar
  39. Gronau R (1977) Leisure, home production, and work: the theory of the allocation of time revisited. J Polit Econ 85(6):1099–1124CrossRefGoogle Scholar
  40. Hahn J, Todd P, Van der Klaauw W (2001) Identification and estimation of treatment effects with a regression-discontinuity design. Econometrica 69(1):201–209CrossRefGoogle Scholar
  41. Hener T (2013) Labeling effects of child benefits on family savings. Working Paper 163, Ifo InstituteGoogle Scholar
  42. Hetschko C, Knabe A, Schöb R (2014) Changing identity: retiring from unemployment. Econ J 124(575):149–166CrossRefGoogle Scholar
  43. Höjestrand T (2009) Needed by nobody: homelessness and humanness in Post- socialist Russia. Cornell University Press, IthacaGoogle Scholar
  44. Human Mortality Database (2015) http://www.mortality.org. University of California, Berkeley, and Max Planck Institute for Demographic Research
  45. Imbens G, Kalyanaraman K (2012) Optimal bandwidth choice for the regression discontinuity estimator. Rev Econ Stud 79(3):933–959CrossRefGoogle Scholar
  46. Imbens GW, Lemieux T (2008) Regression discontinuity designs: a guide to practice. J Econ 142:615–635CrossRefGoogle Scholar
  47. Jensen RT, Richter K (2003) The health implications of social security failure: evidence from the Russian pension crisis. J Public Econ 88:209–236CrossRefGoogle Scholar
  48. Jones TA, Moskoff W (1987) Pensioners in the Soviet labour force: the limits of monetary inducements. Sov Stud 39(1):88–100CrossRefGoogle Scholar
  49. Kahneman DPW, Sarin R (1998) Back to Bentham? explorations of experienced utility. Q J Econ 2(112):375–406Google Scholar
  50. Keane M, Moffitt R (1998) A structural model of multiple welfare program participation and labor supply. Int Econ Rev 39(3):553–589CrossRefGoogle Scholar
  51. Kesavayuth D, Rosenman RE, Zikos V (2016) Retirement, personality, and well-being. Econ Inq 54(2):733–750CrossRefGoogle Scholar
  52. Kim BY (2003) Informal economy activities of Soviet households: size and dynamics. J Comp Econ 31(3):523–551CrossRefGoogle Scholar
  53. Koivumaa-Honkanen H, Honkanen R, Viinamäki H, Heikkilä K, Kaprio J, Koskenvuo M (2000) Self-reported life satisfaction and 20-year mortality in healthy Finnish adults. Am J Epidemiol 152(10):983–991CrossRefGoogle Scholar
  54. Kooreman P (2000) The labeling effect of a child benefit system. Am Econ Rev 90(3):571–583CrossRefGoogle Scholar
  55. Krupka EL, Weber RA (2009) The focusing and informational effects of norms on pro-social behavior. J Econ Psychol 30:307–320CrossRefGoogle Scholar
  56. Krupka EL, Weber RA (2013) Identifying social norms using coordination games: why does dictator game sharing vary? J Eur Econ Assoc 11(3):495–524CrossRefGoogle Scholar
  57. Lee DS, Lemieux T (2010) Regression discontinuity designs in economics. J Econ Lit 48:281–355CrossRefGoogle Scholar
  58. Moffitt R (1983) An economic model of welfare stigma. Am Econ Rev 73(5):1023–1035Google Scholar
  59. Pruckner GJ, Sausgruber R (2013) Honesty on the streets: a field study on newspaper purchasing. J Eur Econ Assoc 11(3):661–679CrossRefGoogle Scholar
  60. Rabin M (1998) Psychology and economics. J Econ Lit 36(1):1–46Google Scholar
  61. Ranney CK, Kushman JE (1987) Cash equivalence, welfare stigma and food stamps. South Econ J 53(47):1011–1027CrossRefGoogle Scholar
  62. Rashid M, Thompson L, Von Gersdorff H, Zotova E (2002) Pension reform in Russia: design and implementation. Technical Report 29017, The World BankGoogle Scholar
  63. Rege M, Telle K, Votruba M (2012) Social interaction effects in disability pension participation: evidence from plant downsizing. Scand J Econ 114(4):1208–1239CrossRefGoogle Scholar
  64. RLMS-HSE (2012) Russia longitudinal monitoring survey. http://www.cpc.unc.edu/projects/rlms-hse. The Carolina Population Center, University of North Carolina at Chapel Hill and the Higher School of Economics, Moscow
  65. Rosstat (2015) Table 7.1: Main socio-economic indicators of living standards of population http://www.gks.ru/wps/wcm/connect/rosstat_main/rosstat/en/main/. Federal State Statsticial Service, Moscow
  66. Szinovacz ME, DeViney S (1999) The retiree identity: gender and race differences. J Gerontol Ser B Psychol Sci Soc Sci 54B(4):S207–S218CrossRefGoogle Scholar
  67. Utrata J (2011) Youth privilege: doing age and gender in Russia’s single-mother families. Gend Soc 25(5):616–641CrossRefGoogle Scholar
  68. Viscusi WK, Huber J, Bell J (2011) Promoting recycling: private values, social norms, and economic incentives. Am Econ Rev 101(3):65–70CrossRefGoogle Scholar
  69. WVS (2015) World value survey 1981-2014 longitudinal aggregate v.20150418 Aggregate File Producer: JDSystems Data Archive, Madrid, Spain. World Values Survey Association (www.worldvaluessurvey.org)

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of Economics and FinanceUniversity of Guelph (Canada)GuelphCanada
  2. 2.Institute of Labor Economics (IZA)BonnGermany
  3. 3.Department of EconomicsSt. Francis Xavier UniversityAntigonishCanada
  4. 4.Rimini Centre for Economic Analysis (RCEA)WaterlooCanada

Personalised recommendations