The impact of the New Rural Pension Scheme on labor supply of intra-household prime-age adults in rural China

Abstract

ABSTRACT Does the New Rural Pension Scheme (NRPS) affect labor supply of intra-household prime-age adults in China? This study provides evidence using the natural experiment model (DID model) and Chinese Health and Nutrition Survey (CHNS) longitudinal survey data from 2000 to 2011. Four major conclusions emerge. First, the influence of the NRPS on labor supply of intra-household prime-age adults is not statistically significant. Second, the effects of the NRPS on labor supply differ for various groups. For example, the negative effect of NRPS on the probability of entering regular work is greater for women; the effect of NRPS the probability of becoming irregular workers is positive for the group aged 25 to 34, whereas they are negative for other age groups. Third, for the mechanisms, both the household income hypothesis and child care support hypothesis are supported, but the household income effect is small.