Does social insurance in China enhance people’s well-being?

Abstract

The effect of social insurance in China, including basic pension insurance and basic medical insurance, on people’s well-being is researched in this study. The utility function is firstly established to inspect the utility changes before and after the insurance; then, with the establishment of nonparametric estimation model, CGSS is utilized for studying the effects of people participating in social insurance on the subjective well-being. The research findings show that the participation in basic pension insurance and basic medical insurance could significantly enhance people’s well-being and the subjective well-being enhances more obviously with larger longevity risk or larger medical risk. The more risk aversion of people would enhance the participation in social insurance to promote the subjective well-being. This study further promotes the coverage of social insurance for the government supporting the enhancement of people’s well-being.