Whether Pension Program Stimulates the Consumption of Addictive Products: Evidence from China’s New Rural Pension Scheme

Abstract

ABSTRACT Much attention has been paid to evaluating the policy effects of pension programs, but few studies have focused on possible inefficiencies stemming from their implementation. Drawing on a quasi-natural experiment associated with the adoption of China’s New Rural Pension Scheme (NRPS), this study explores the impact of the NRPS on food consumption among rural residents. A difference-in-differences (DID) analysis is performed using panel data from the 2009 and 2013 National Rural Fixed Observation survey. Results show that participation in the NRPS improves residents’ dietary quality by increasing the consumption of recommended foods and decreasing the consumption of non-recommended foods. However, the results also show that the NRPS is associated with increased consumption of addictive and unhealthy products, especially in households with lower average levels of education, poorer self-reported health, and older adults over age 60. Findings suggest that when examining the possible health effects of new pension policies, it is essential to account for potential increases in the intake of unhealthy and addictive products, such as cigarettes and alcohol.