The impacts of raising the public pension eligibility age on time allocation of elderly people: Evidence from Japan

Abstract

With many countries facing aging populations, the sustainability of public pensions has become a pressing issue. I evaluate the impacts, including both employment and time allocation, of public pension reform on the lifestyles of the elderly. In Japan, all residents aged 20 or older are covered by the public pension, with eligibility determined mechanically based on age. I focus on the reform raising the eligibility age from 60 to 61 in 2001 for men. I estimate the impacts using a sharp regression discontinuity design with the birth month as the running variable, setting April 1941 for males as the cutoff. The results show that the reform for men increases employment rates by 20.7 percentage points and work-related hours by 167.2 min per day but has the effect of decreasing men’s housework-related activities by 23.4 min, leisure for relaxation by 28.6 min, and social activities by 71.4 min per day on weekdays.