The Effect of Pension Income on Land Transfers: Evidence from Rural China

Abstract

In this study, we use an exogenous income variation generated from the Chinese New Rural Pension Scheme (NRPS) to examine the causal effects of pension income receipt on rural households’ land transfers. The regression discontinuity design (RDD) results show that pension income receipt would increase the probability of a senior household to rent out land by about 8–14 percentage points. In contrast, the NRPS program has no significant effect on households’ decision to rent in land. Various robustness checks support these findings. This study contributes to the limited literature on the evaluation of pension programs in developing and transition countries by investigating an outcome that is largely ignored but of increasing importance.