Who Are the Beneficiaries of China's New Rural Pension Scheme? Sons, Daughters, or Parents?

Zhang Zhang,Luo Luo,Robinson Robinson

doi:10.3390/ijerph16173159

Abstract

By applying a fuzzy regression discontinuity design, this study investigates whether sons, daughters, or parents are the beneficiaries of China’s New Rural Pension Scheme. Using data drawn from the China Health and Retirement Longitudinal Survey, our results indicate that pension income crowds out approximately 27.9% of the monetary support from adult sons and decreases the likelihood that adult sons live with their parents by 6.5%. However, we do not find a significant effect of pension income on the likelihood that adult daughters live with their parents. In regards to the well-being of parents, which is measured by consumption and health outcomes, the results show that pension income increases food and non-food consumption by 16.3 and 15.1%, respectively, and improves the psychological health of the elderly. Accounting for the different effects of pension income for those with different income levels, our results show that the New Rural Pension Scheme only has a significant effect on the poor elderly.

Highlights

With the largest elderly population in the world, China is aging at an unprecedented level
With considerable attention being paid to intergenerational economic transfer and living arrangements [6,7], few studies have investigated the differences in benefits that the elderly and their adult children receive from the New Rural Pension Scheme (NRPS)
As aging creates great challenges for traditional family-based eldercare in rural China, social pension programs are being considered by the government to ensure the well-being of the growing elderly population

Summary

Introduction

With the largest elderly population in the world, China is aging at an unprecedented level. Two major factors have placed pressure on this traditional family-based system: the implementation of the one-child policy during the last three decades and the rural-to-urban migration of young adults beginning in the 1990s [1,2]. In order to ensure the well-being of the aging population and establish a sustainable social pension system in rural China, the Chinese government launched the New Rural Pension Scheme (NRPS) in late 2009, and this program may have important implications for the traditional family support system. To alleviate the pressure stemming from an aging population, social pension programs are adopted as an important policy instrument in both developed and developing countries [3]. The NRPS is one of the social pension programs launched by the Chinese government for the purpose of guaranteeing the basic needs of rural residents when they are old.

Methods

Results

Conclusion