Welfare Expenditure Growth and its Impact on Elderly Suicide Rates

We investigate the causal effect of increased elderly welfare expenditure in South Korea on the suicide rate among older adults, using predicted expenditure changes induced by the Basic Pension reform as an instrumental variable. Our findings show that higher welfare spending explains 74.5% of the decline in the suicide rate among individuals aged 65+ between 2013 and 2019, with especially large reductions among men aged 80+. Household-level evidence indicates that while total income remained stable, consumption increased following the reform, particularly in transportation and leisure. We further show that the reform reduced unmet medical needs and stress and increased participation in community and leisure activities, while leaving depressive symptoms unchanged. Overall, the results are consistent with the interpretation that stronger public income transfer programs reduce income uncertainty and expand opportunities for consumption, leisure, and social participation, thereby contributing to lower elderly suicide rates.