Do Social Pensions Help People Living on the Edge? Assessing Determinants of Vulnerability to Food Poverty Among the Rural Elderly

Abstract

This study investigates the effect of the New Rural Pension Scheme (NRPS) on the ex post food poverty and ex ante vulnerability of the rural elderly across different regions, by applying a nationally representative survey dataset. Using province-specific food poverty lines calculated by a least-cost linear programming approach, the overall estimated vulnerability to food poverty in rural China is 28.7%, with a majority of them being vulnerable due to low expected food expenditure. Regional analysis indicates that more developed regions experience lower food poverty incidence and vulnerability compared with less developed regions. To address the endogeneity of pension payment, a fuzzy regression discontinuity design finds that pension income significantly increased the expected food expenditure amongst the elderly, thus decreasing the vulnerability. Estimation results for heterogeneous groups suggest that the NRPS worked better for the elderly who are chronically poor and those who are vulnerable due to low expected food expenditure.