The Impacts of the New Rural Pension Scheme on the Elder-Care Pattern in Rural China

Abstract

AbstractThis chapter investigates the impact of the New Rural Pension Scheme (NRPS) on the elderly support pattern, involving living arrangements, elder care, financial support, and intergenerational transfers, etc., in rural China. Using data from the waves 2008 and 2011 of the Chinese Longitudinal Healthy Longevity Survey (CLHLS), we attempt to identify the causal effect of the NRPS by adopting the strategy of the propensity score matching with difference-in-differences. We find that participating in the NRPS has increased significantly the enrolled elders’ willingness and the actual likelihood to live independently. Meanwhile, the enrolled elderly have also decreased their dependence on their adult children in terms of elder care, and correspondingly turned more to spousal care, and increased the probability of purchasing formal care services from the external market. We also find the NRPS has improved the financial independence of the enrolled elderly and the possibility that the primary economic source comes from adult children has declined significantly. Therefore, the NRPS has begun to play an important role to a certain extent in remolding the elder support model in rural China, though it has not fundamentally shaken the traditional elderly support patterns.