Abstract
With the rapid decline in China's fertility rate, the acceleration of aging, the continuous miniaturization and nucleation of China's family structure, and the deterioration of the elderly's living conditions and mental states, the elderly's mental health has emerged as a major public health issue and a major social problem. Pensions are the elderly's primary source of income, and they can help them meet their basic needs while also promoting family harmony and improving their mental health. Based on the data of the 2012, 2016, and 2018 Chinese Family Panel Studies (CFPS), we empirically examined the impact of pensions on the elderly's mental health by using the fixed effects model, mediating effect model, and so on. The results show that receiving pension benefits can significantly reduce the level of depression and improve the mental health of the elderly. Receiving pension benefits causes reverse intergenerational economic transfer, which reduces the effect of pensions on the elderly's mental health to some extent, but the life care and mental comfort provided by children increases when the elderly share pensions with their children. Overall, receiving pension benefits improves the mental health of the elderly. In addition, the effect of pensions on the elderly with different characteristics is heterogeneous. The older elderly, women, the elderly living with their children, and the elderly in rural areas all benefit more from receiving pension benefits. Moreover, the worse the mental health of the elderly is, the stronger the influence of pensions on their mental health is. Our discussion has important policy implications.