The goal of this study was to examine the effect of a social pension programme for older adults in South Korea, Basic Pension Scheme (BPS) on material hardship and subjective well-being. We apply a regression discontinuity design (RDD) to estimate the effect of the BPS on the material hardship and life satisfaction of older people between the ages of sixty-one and sixty-eight. Data come from Korea Welfare Panel Study (KOWEPS) wave 12 survey (2017, N = 3,932). The BPS benefit reduces the risks of housing hardship, bill payment delay and food insecurity. Interestingly, while the effect sizes of the BPS on mitigating the material hardship increase as income decreases, the lower-income groups were less satisfied with the pension provision than middle- and upper-income groups. This study contributes to the growing body of literature on material hardship for older adults in an Asian country facing persistent old-age poverty and immature public pensions.

To contribute to a retirement plan (barring an increase in income), an individual must either reduce consumption or increase debt. Using data from the 2004 wave of the Survey of Income and Program Participation, we examine the extent to which contributing to 401(k)-type accounts leads to an increase in short-term financial difficulties, particularly among low-income individuals. After instrumenting for plan take-up, we find that contributing to a 401(k) plan appears to have a small positive impact on the presence of any material hardship and debt holding among the lowest income quintiles, though that effect diminishes further up the income distribution.