turn positive, but are small in magnitude and statistically insignificant. We therefore rule out that household composition may be the driver behind our prior results.

**Table 21: Living with Another Adult below the Eligibility Age of Potential Beneficiaries**

|_Variable_|_(1)_<br>_OLS_<br>_All_|_(2)_<br>_OLS_<br>_All_|_(3)_<br>_OLS_<br>_Males_|_(4)_<br>_OLS_<br>_Females_|_(5)_<br>_IV_<br>_All_|_(6)_<br>_IV_<br>_All_|_(7)_<br>_IV_<br>_Males_|_(8)_<br>_IV_<br>_Females_|
|---|---|---|---|---|---|---|---|---|
|Colombia Maor|−0.052***|−0.050***|−0.053***|−0.043***|0.030*|0.029|0.030|0.023|
|y|(0.011)|(0.011)|(0.013)|(0.012)|(0.017)|(0.018)|(0.030)|(0.025)|
||<sup>0.783***</sup>|0.772***|0.780***|0.777***|0.786***|0.775***|0.789***|0.775***|
|Dependent variable by year|(0.029)|(0.029)|(0.042)|(0.037)|(0.029)|(0.030)|(0.042)|(0.038)|
|Dd ibl b|<sup>0.899***</sup>|0.887***|0.924***|0.848***|0.905***|0.893***|0.928***|0.854***|
|epenent varae y area|(0.018)|(0.018)|(0.028)|(0.028)|(0.018)|(0.018)|(0.030)|(0.028)|
|Observations|22,546|22,484|9,472|13,007|22,358|22,297|9,298|12,892|
|R-squared|0.072|0.089|0.118|0.077|0.066|0.083|0.112|0.073|
|Municipalities, number|296|296|293|294|286|286|273|283|
|F|328.6|216.1|140.6|92.54|351.2|226.1|138.7|88.22|
|Partial R-squared|||||0.0889|0.0914|0.0956|0.0918|
|Kleinbergen-Paap statistic|||||2621|2689|1330|1626|
|OIR test|||||0.670|0.670|0.265|0.929|
|Endogeneity test|||||0.000|0.000|0.00564|0.00987|
|_First stage_|||||||||
|Dd ibl b|||||0.008|0.006|0.009|(0.004|
|epenent varae y year|||||(0.024)|(0.024)|(0.032)|(0.031)|
|Dependent variable by area|||||−0.006<br>(0.017)|−0.006<br>(0.017)|−0.009<br>(0.029)|−0.006<br>(0.027)|
||||||0.976***|0.983***|0.979***|0.990***|
|Instrument from probit|||||(0.019)|(0.019)|(0.027)|(0.025)|

_Note:_ The table illustrates a linear probability model on a dependent variable indicating that an adult below eligibility age lives in the same household. The IV specification uses a three-stage procedure for binary treatment variables. Only the OIR test is derived from a two-step procedure. Columns (1) and (5) do not include additional control variables. Standard errors are shown in parenthesis.

# **8. Conclusion**

The literature on the labor market effects of noncontributory pensions has so far almost exclusively focused on income effects, showing that they incentivize beneficiaries to leave the labor force or reduce the number of hours they work. Our study offers a different perspective. Because noncontributory pensions are essentially a nonconditional cash transfer to the elderly, their effects should, overall, be much more nuanced. In particular, a reliable, even if small, additional income stream could allow beneficiaries to engage in economic activities that require some up-front investment or that are generally more risky. The Colombia Mayor Program provides the ideal scenario to test these hypotheses, given the small amount of the associated benefit, which would imply a small income effect, and the low age of eligibility. Using IV techniques, we find that the benefit increased labor force participation among men, especially men in their 60s. This effect is particularly pronounced 38