Does social pension buy improved mental health and mortality outcomes for senior citizens? Evidence from South Africa's 2008 pension reform

In South Africa, men were traditionally eligible to receive government pensions at 65 years. However, that eligibility criterion was changed in 2008 to allow men to receive a pension payout at 60 years. This study is designed to quantify the impact of the 2008 pension reform on mental health outcomes (depression and traumatic stress) and deaths among 60-year-old men from disadvantaged households without advanced education. This analysis used secondary data issued by Statistic South Africa- General Household Survey. Men who reported earning a pension at 60 years from 2008 to 2014 were exposed to the 2008 pension reform and thus were classified as the treatment group. The 60-year-old men during 2002–2007 were ineligible to earn the pension, therefore considered the control group. We then used a Two-stage Least Squared Model (2SLS) to quantify the impact of the 2008 pension reform on healthcare utilization, depression cases, traumatic stress cases, and deaths among 60-year-old men. The model shows that the 2008 pension reform improved healthcare utilization by 3 % in the cohorts of men who benefitted from the 2008 reform. The 2008 pension reform averted depression cases, traumatic stress cases, and deaths among 60-year-old men by 3 %, 4 %, and 5 %, respectively. The impact of the 2008 pension reform in averting deaths among 60-year-old men was higher in urban regions than rural regions. We concluded that the 2008 pension reform successfully bought improved mental health outcomes and prevented depression, traumatic stress, and deaths among 60-year-old men.