Pension Receipts and Household Expenditure Patterns: Insights from Elderly Households

This study utilised the Working Leser Model approach to analyse the influence of pension receipt on expenditure patterns among households with adults in Sri Lanka. Analysing data from 9,421 households with at least one elderly person (aged 60 or above) from the Household Income and Expenditure Survey (HIES 2019), the research reveals that pension receipt significantly and positively influences spending on food and consumer goods of the household. While pension income broadly boosts spending, results further reveal nuanced allocation trends, with education, health, and other expenses increasing as a proportion of total expenditure, whereas the relative proportions devoted to food, housing, and consumer durables tend to decline. Factors like the gender of the household head, marital status, age of the head, and number of working members also influence specific expenditure allocations. Female-headed households tend to spend more on education, travel, and leisure, while male-headed households tend to spend more on food and health. Existing disparities in pension access, largely tied to educational attainment and the employment sector, underscore the urgent need for policies aimed at broadening pension coverage to those in the private and informal sectors to ensure a more equitable future for the ageing population.