Supporting Seniors: How Low-Income Elderly Individuals Respond to a Retirement Support Program

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See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Wenlan Qian

National University of Singapore - NUS Business School

Tianyue Ruan

National University of Singapore (NUS) - Department of Finance

Bernard Yin Yeung

National University of Singapore - Business School

Date Written: May 27, 2020

Abstract

Insufficient savings for retirement expose individuals to financial vulnerability in the post-retirement years and prompt governments to consider support measures. We study a government cash subsidy program for the low-income elderly population in Singapore. Using comprehensive, high-frequency transaction data, we find that elderly individuals increase spending by 0.7 dollars per dollar of subsidy received. We also show that they increase food expenditure and the variety of retail purchases. The subsidy program increases spending more for those more liquidity constrained, regardless of their income level. We also provide evidence that a cash transfer is more effective than a voucher transfer in stimulating consumption.

Keywords: retirement support, cash transfer, consumption, liquidity constraints

JEL Classification: D12, D14, H24

Suggested Citation

Agarwal, Sumit and Qian, Wenlan and Ruan, Tianyue and Yeung, Bernard Yin, Supporting Seniors: How Low-Income Elderly Individuals Respond to a Retirement Support Program (May 27, 2020). Available at SSRN: https://ssrn.com/abstract=

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Wenlan Qian

National University of Singapore - NUS Business School ( email )

15 Kent Ridge Drive
Singapore 117592, 119245
Singapore
(65) 65163015 (Phone)

HOME PAGE: http://sites.google.com/site/wenlanqian/

Tianyue Ruan (Contact Author)

National University of Singapore (NUS) - Department of Finance ( email )

Mochtar Riady Building
15 Kent Ridge Drive
Singapore, 119245
Singapore

HOME PAGE: http://https://truan.github.io/

Bernard Yin Yeung

National University of Singapore - Business School ( email )

15 Kent Ridge Drive
BIZ 1 Level 6
Singapore, 119245
Singapore
65 6516 3075 (Phone)
65 6779 1365 (Fax)

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