Retirement Savings and Elderly Living Arrangements: Evidence from India

This article examines the role of retirement savings on the living arrangements of persons aged 60 years and above in India. A major challenge to empirically analyse this relationship is the lack of a comprehensive database that captures the financial savings and health indicators of the elderly population in India in the same framework. Therefore, we use two nationally representative data sets and combine them at the district level for our empirical exercise. We exploit the exogenous variation in the exposure to retirement savings across the districts to analyse how retirement savings impact the living arrangements of elderly persons. Our findings indicate that elderly persons in districts with high retirement savings are more likely to live independently. Elderly people from the lower-income strata with retirement savings are more likely to live independently than those from higher-income groups. Our results demonstrate the importance of retirement savings in improving the welfare of the elderly population and the need for further improving the financial penetration among the elderly in India.