Abstract
This study investigates the impact of a new social pension program in the People’s Republic of China on the health expenditures of rural elderly people. Results show that receiving pension payments increases outpatient care utilization and expenditures among ill elderly people. Pensions improve bargaining power for elderly people who live with their children or grandchildren. This enables elderly people to spend more on health care. However, pensions have no significant effect on medical expenditures of elderly people who live independently.
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