Association for Public Policy Analysis & Management

We examine the impact of income transfers to the elderly paying particular attention to potential impacts over health. We exploit the Brazilian age-based rural pension system, which is not based on means-testing and does not impose any non-work requirements over recipients. Despite being anticipated, transfers attached to this pension system likely represent an important liquidity shock for the eligible population. We employ a regression discontinuity strategy to estimate: (i) the impact of pension eligibility on tobacco and alcohol consumption, and; (ii) vital registration records to examine whether mortality patterns plausibly linked to the consumption of vice goods change around the age of pension eligibility. Using four differentseparate survey and administrative datasets, we find strong evidence that pension take-up follows the predicted pattern of increased uptake around the age of eligibility, but that pension eligibility is not as closely linked to departure from the labor market as has been observed in other contexts. We observe no effect on tobacco or alcohol consumption, or on mortality outcomes that are plausibly linked to smoking or drinking behaviors. These findings augment our understanding of the relationship between government assistance and recipient well-being, and contribute to a literature seeking to decouple welfare receipt from social disruption.