Towards a Better Life? Assessing Some Initial Effects of Russian Pension Reform

This study assesses the initial causal effects of the 2018 pension reform on subjective well-being alongside economic sentiment of Russian individuals and examines which groups of people were mostly influenced by the increased retirement age. Before 2019, men could retire at 60 years old and women at 55 years old. The pension reform is aimed to increase the retirement age gradually by five years to 65 years for men and 60 years for women. The objective of this reform is to solve unsustainability issues in the Russian Pension Fund because of population ageing and declining fertility rates. Using the difference-in-differences method and the synthetic control method we show that people close to the retirement threshold were most vulnerable to the 2018 pension reform. Due to the adopted policy, they became less confident in the current and future economic situation in the country alongside their personal future life in terms of their prospects and financial situation. Among individuals below the subjective poverty threshold, people close to eligibility were more exposed to the pension reform which lead to a decrease in their trust towards their management in the workplace.