Does Receiving a Pension Improve Wellbeing: Evidence from Propensity Score Matching Among Older Adults in Colombia

Details

Supervisors

Puerta Álvarez, Henry Daniel ; Vandenberghe, Vincent

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale, à finalité spécialisée

Abstract

enMost adults spend their working lives looking forward to retirement, yet the transition from a structured routine to open-ended days raises an important question: is that long-awaited moment enough when a clear sense of purpose is no longer there? This study examines whether receiving pension income is associated with greater well-being among older adults in Colombia. Using data from the 2024 Quality of Life Survey (ECV 2024) and a propensity score matching approach (Rosenbaum & Rubin, 1983), pensioners are compared with observationally similar individuals who do not receive a pension, controlling for differences between the two groups. A composite well-being index constructed following Kling et al. (2007) shows that receiving a pension is associated with an increase of 0.097 standard deviations. The effect is most evident in the economic dimension: pensioners report 0.664 points higher satisfaction with their income and 0.433 points higher satisfaction with their work situation, on a 0–10 scale. No significant effects are found for health or day-to-day emotional well-being. Effects are larger in rural areas and among men, though these differences are not conclusive. Rosenbaum bounds (2002) suggest moderate robustness to unobserved confounders (critical Γ ≈ 1.3). Finally, in terms of public policy, complementary programs focused on psychosocial support and active aging are proposed, in order to address the dimensions of well-being, health and emotional welfare, that financial transfers do not reach.