New Rural Pension Scheme Research Articles

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

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.

Does land expropriation to neighbors affect the enrollment of bystanders in pension programs?

Land expropriation can incur not only economic costs but also political costs. Using panel data from the China Family Panel Studies (CFPS), we investigate the impact of land expropriation on the compliance behaviors of rural residents for the New Rural Pension Scheme (NRPS), which is an extremely important public policy led by the government in China. To exclude the potential confounding impacts of reduced social security levels resulting from land expropriation, we focus on farmers in the same village who have not suffered land expropriation. The results of the difference-in-differences (DID) regression model suggest that land expropriation significantly reduces the probability of farmers within the same village, who have not suffered land expropriation, enrolling in the NRPS. The primary reasons are that land expropriation significantly decreases the trust of non-land expropriated farmers in local officials and the NRPS. Additionally, land expropriation has a stronger impact on unexpropriated farmers with lower levels of education, as well as unexpropriated households without Communist Party of China membership or with a high level of dependence on agriculture. Our findings suggest the cost of land expropriation is larger than previously thought, as it generates broader political trust and policy compliance issues.

Are children and pension substitutes? Evidence from the new rural pension scheme in China

ABSTRACT The study examines whether children, widely recognized as an important source of old-age security in many societies, reduce people’s demand for a social pension programme in rural China – the New Rural Pension Scheme (NRPS). OLS results suggest that having one more child will lower the NRPS participation rate by 3.0 percentage points and the effect of an additional son is larger than the effect of an additional daughter. However, using fines on unauthorized births under the One Child Policy in China as the instrument of children quantity, I find that the number of children has no causal effect on NRPS participation. Heterogeneity analysis shows that, when all children are adults, the number of children will increase the annual NRPS contribution. These findings suggest that old-age support based on family networks does not necessarily impede the development of formal pension programmes.

Reducing energy poverty by nearly universal pension coverage of rural China

This paper estimates the causal effect of income change on reducing energy poverty by exploiting age-based eligibility for China’s New Rural Pension Scheme (NRPS) through a regression discontinuity (RD) design. More than one billion people worldwide live in energy poverty, and the situation is even more difficult in developing world. It is an important development challenge to reduce energy poverty, which could be further associated with health outcome, labor productivity, and educational achievements. While public policies that increase income for poor households are the most direct ways to reduce energy poverty, the reverse causality makes establishing a convincing causal link between income and energy poverty challenging. Using the quasi-experimental variation in income induced by NRPS, this paper addresses the endogeneity of income and examines the impact of exogenous sharp changes in income on energy consumption behaviors. The findings indicate substantial increases in modern energy consumption and sizable reductions in solid fuels (e.g., straw and fuelwood), suggesting that “windfall income” by pension coverage alleviates energy poverty. Although individuals could anticipate the income shocks by pension coverage, the evidence suggests that they do not engage in anticipatory responses to smooth their consumption. Further evidence shows that liquidity constraints may be the underlying mechanism for the lack of anticipatory responses in household energy consumption. Besides reducing energy poverty, the results demonstrate that pension coverage leads to a decrease in elderly labor supply, an increase in subjective health and life satisfaction, and an increase in non-energy consumption, all of which are positively associated with the well-beings of senior citizens. We anticipate that the findings of this paper in the context of China may be extended to developing world which has been expected to set up targeted measures to tackle energy poverty in upcoming decades.

Do the New Rural Pension Scheme promote the health status of chronic patients in old age? —Evidence from CHARLS 2018 in China

BackgroundMany researchers have examined the impact of social insurance on health in elderly. However, in most cases, they have only demonstrated correlational results and have not been able to determine causal effects, possibly because confounding biases have not been fully addressed. In this study, we investigated the health effects of the New Rural Pension Scheme (NRPS) on the elderly (age≥60 years old) with chronic diseases in rural areas, and to explore the causal relationship and effects of NRPS and health status.MethodsThis paper used data from the 2018 China Health and Retirement Longitudinal Study (CHARLS) and applied Bayesian networks and fuzzy regression discontinuity design to conduct causal analysis. Bayesian networks were used to explore the causal directed acyclic graphs of factors related to NRPS and health status. Based on the results of Bayesian network, a fuzzy regression discontinuity design was employed to estimate the causal effect of NRPS on health status.ResultsAmong rural elderly with chronic diseases, Bayesian network mapping of causal relationships among NRPS, health status and covariates showed that age was a common cause of NRPS receipt and satisfaction with health. The results of the fuzzy regression discontinuity analysis showed that the effect of receiving NRPS on the health status was positive, but there was no statistically significant difference concerning the interval estimates. The results of the subgroup analysis with chronic obstructive pulmonary disease (COPD) and asthma indicated that the effect of NRPS receipt on the health status of elderly people with COPD was positive. There was a statistically significant effect of receiving NRPS on self-rated health description (β1=3.653,P=0.032\\documentclass[12pt]{minimal} \\usepackage{amsmath} \\usepackage{wasysym} \\usepackage{amsfonts} \\usepackage{amssymb} \\usepackage{amsbsy} \\usepackage{mathrsfs} \\usepackage{upgreek} \\setlength{\\oddsidemargin}{-69pt} \\begin{document}$${\\beta }_{1}=3.653,P=0.032$$\\end{document}) and health satisfaction (β1=4.204,P=0.033\\documentclass[12pt]{minimal} \\usepackage{amsmath} \\usepackage{wasysym} \\usepackage{amsfonts} \\usepackage{amssymb} \\usepackage{amsbsy} \\usepackage{mathrsfs} \\usepackage{upgreek} \\setlength{\\oddsidemargin}{-69pt} \\begin{document}$${\\beta }_{1}=4.204,P=0.033$$\\end{document}) in COPD population and a statistically significant effect of receiving NRPS on health satisfaction in asthma population (β1=9.844,P=0.008\\documentclass[12pt]{minimal} \\usepackage{amsmath} \\usepackage{wasysym} \\usepackage{amsfonts} \\usepackage{amssymb} \\usepackage{amsbsy} \\usepackage{mathrsfs} \\usepackage{upgreek} \\setlength{\\oddsidemargin}{-69pt} \\begin{document}$${\\beta }_{1}=9.844,P=0.008$$\\end{document}).ConclusionThis paper has confirmed the contribution and positive causal effect of NRPS on health status in a subgroup of older adults with COPD and asthma, using the CHARLS database as evidence. Thus, Chinese government should increase the take-up rate of the NRPS to enhance their positive impact on health status of elderly people with chronic diseases in rural areas.

Re-Examine: The Power of China’s New Rural Pension Scheme

Drawing upon data from the China Family Panel Studies (CFPS) and the China Health and Retirement Longitudinal Study (CHARLS), this paper employs a Difference in Differences (DID) approach to investigate the varying impacts of the New Rural Pension Scheme (NRPS) across different regions in China. The empirical results reveal that the NRPS has generally improved the health outcomes of residents. Notably, the benefits of the NRPS are more pronounced in rural and economically advanced areas, while its effects are not statistically significant in less developed and urban regions. This analysis elucidates the underlying reasons for these regional disparities, attesting to the pension policy’s efficacy and advancing the scholarly conversation on pension policy research.

New rural pension scheme, intergenerational interaction and rural family human capital investments.

The new rural pension scheme (NRPS) can improve the quality of life for rural older adult individuals; however, can it have a spillover effect on rural household human capital investments through intergenerational interactions? Based on data from the China Family Panel Studies (CFPS) in 2010, 2012, 2014, 2016, and 2018 and from the perspective of intergenerational interactions, the spillover effect and influencing mechanism of the new rural insurance policy on rural household human capital investments are empirically tested. The results show that the participation of families in the new rural insurance policy can significantly promote the human capital investments of rural families, and they are robust. Moreover, the spillover effect of this new policy is significantly different due to the gender, insurance phase, and family income of the insured. Through intergenerational interactions, the new rural insurance policy has an impact on the human capital investments of rural families from the material level of intergenerational economic support, housework and childcare for children and the nonmaterial level of old-age care cognition. Therefore, continuing to promote the coverage of the new rural insurance policy and scientifically improving rural social security through publicity and education to promote benign intergenerational family interactions can improve the accumulation of human capital in rural areas.

Impact of pension income on healthcare utilization of older adults in rural China

ObjectiveIn China, rural residents experience poorer health conditions and a higher disease burden compared to urban residents but have lower healthcare services utilization. Rather than an insurance focus on enhanced healthcare services utilization, we aim to examine that whether an income shock, in the form of China’s New Rural Pension Scheme (NRPS), will affect outpatient, inpatient and discretionary over-the-counter drug utilization by over 60-year-old rural NRPS residents.MethodsProviding a monthly pension of around RMB88 (USD12.97), NRPS covered all rural residents over 60 years old. Fuzzy regression discontinuity design (FRDD) was employed to explore the NRPS causal effect on healthcare services utilization, measured by outpatient and inpatient visits and discretionary over-the-counter drug purchases. The nationwide China Health and Retirement Longitudinal Study (CHARLS) 2018 provided the data.ResultsWithout significant changes in health status and medication needs, 60-plus-year-old NRPS recipients significantly increased the probability of discretionary OTC drug purchases by 33 percentage points. NRPS had no significant effect on the utilization of outpatient and inpatient utilization. The increase in the probability of discretionary OTC drug purchases from the NRPS income shock was concentrated in healthier and low-income rural residents. Robustness tests confirmed that FRDD was a robust estimation method and our results are robust.ConclusionNRPS was an exogenous income shock that significantly increased the probability of discretionary over-the-counter drug purchases among over 60-year-old rural residents, but not the utilization of inpatient or outpatient healthcare services. Income remains an important constraint for rural residents to improve their health. We recommend policymakers consider including commonly used over-the-counter drugs in basic health insurance reimbursements for rural residents; provide health advice for rural residents to make discretionary over-the-counter drug purchases; and to mount an information campaign on over-the-counter drug purchasing in order to increase the health awareness of rural residents.

Do social assistance programs promote the use of clean cooking fuels? Evidence from China's new rural pension scheme

Government social assistance programs play a vital role in shaping household behaviors, from food purchases to human capital investments. Yet, little attention has been given to understanding the impacts of these programs on household energy choices. Drawing upon data from China's New Rural Pension Scheme (NRPS) – a cash transfer plan targeting rural seniors aged 60 and above – this study aims to shed light on how such a program affects the cooking fuel choices among beneficiaries. The results show that: (1) the NRPS promotes a shift from traditional biomass fuels to cleaner fuels, primarily driven by reduced firewood adoption and increased electricity usage; (2) the effects are stronger for lower-income households and the older age group (aged 70 and above); (3) enhancing household income and discouraging farm work participation are possible mechanisms through which pension coverage influences fuel choices. Overall, these findings highlight the effectiveness of social assistance programs in improving resident well-being and facilitating energy transitions in rural areas.

Do pension subsidies reduce household education expenditure inequality? Evidence from China

This study focuses on the effect of pension subsidies on inequality in household education expenditures using data from the China Family Panel Studies for 2010, 2012 and 2014. Estimates from fixed effects (FE) models and instrumental variables (IV) methods show that New Rural Pension Scheme (NRPS) subsidies significantly reduce inequality in education expenditures among rural households. Further evidence suggests that pension subsidies significantly increase education expenditures of rural low- and middle-income households. Our study suggests that pension subsidies play an important role in reducing inequality in household education expenditures. Especially for low- and middle-income households, government welfare policies targeting the elderly may have longer-term benefits than expected.

Can China's new rural pension scheme alleviate the relative poverty of rural households? An empirical analysis based on thePSM‐DIDmethod

AbstractBased on five‐period panel data from the China Family Panel Studies 2010–2018, this paper uses the propensity score matching difference‐in‐differences (PSM‐DID) method to comprehensively evaluate the effects of the New Rural Pension Scheme (NRPS) on alleviating rural households' relative poverty. At the same time, based on the theory of sustainable livelihoods of rural households, the mediating effects model is applied to analyse the mechanism of rural households' livelihood capital. The results of the study are as follows. (1) The NRPS helps alleviate the relative poverty of rural households. (2) The livelihood capital of rural households is an important mechanism for the NRPS to alleviate the relative poverty of rural households, and social capital, financial capital, and human capital all play a part in the mediating effect. (3) The results of the heterogeneity tests based on the stage of rural households' participation in the NRPS and the region of participation in the NRPS indicate that the governance effects of the NRPS on rural households' relative poverty are more significant among households in the contributory stage and the central and western regions. Additionally, the results are supported by robustness tests, such as replacing the dependent variable and the PSM method. The findings of this paper have important implications for the establishment of a long‐term mechanism to address relative poverty and the construction of a more efficient and inclusive rural social pension insurance system in China and other developing countries.

Enrollment in public pension program and household land transfer behaviour: Evidence from rural China

ABSTRACT Although farmland transfer is a radical solution to the problem of sustainable development of the land rental market in China, there is insufficient research that attempted to quantitatively explore the determinants of land transfer behaviour, particularly the effects of enrolment in public pension programs. In this paper, we examine how enrolment in the recently established and expanded New Rural Pension Scheme (NRPS) can affect land transfer decisions among the age-eligible and age-ineligible rural residents. Specifically, our study employs balanced panel data from the first two waves of the China Family Panel Studies (CFPS) in the year 2010 and 2012. It reveals that, although the enrolment in the public pension system increases the scale of farmland transfer among age-eligible people, this effect is not shown among age-ineligible members. Moreover, for households with members over the age of 60, the positive income effects are concentrated among farmers from low-income family; for other groups, the heterogeneous outcomes are insignificant. These estimates may offer insights for the dynamic adjustments of the public pensions for the elderly population and for enhancing the vitality of land transfer in rural China.

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

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.

How Does China’s New Rural Pension Scheme Affect Agricultural Production?

This study examines the spillover effects of China’s New Rural Pension Scheme (NRPS) implemented in 2009 as a cash transfer program for agricultural production. Based on the data collected by the China Health and Retirement Longitudinal Survey (CHARLS) in four periods (2011, 2013, 2015 and 2018), we employ Seemingly Unrelated Regression to explore how China’s NRPS affects agricultural production. Our findings show that NRPS pensions reduce household operating areas by 1.99 mu and agricultural investment by 1150 yuan, while increasing the labor time of their own agricultural production by 168 h, and farmers in the payment period have a similar impact. This finding is still reliable after a series of robustness tests. Gender heterogeneity analysis indicates that male participation in NRPS is more likely to reduce the actual operating area and increase the labor input of the family, while female participation in NRPS is more likely to reduce the agricultural capital input of the family. Moreover, the in-depth study of agricultural performance shows that the implementation of NRPS helps increase the average output value per mu by 700 yuan and technical efficiency by 0.2%, although this is at the cost of declining labor productivity. This study links the joint decision-making of agricultural production factor inputs with pension schemes and contributes to the development of relevant research, which may provide policy implications for how cash transfer schemes affect agricultural production and agricultural performance in other countries.

Parents' pension eligibility and migrant consumption in urban China: Evidence from a quasi‐experiment

AbstractThis article analyzes data from the 2009 and 2014 waves of the Survey on Rural Urban Migration in China (RUMiC) to investigate the impact of parents' pension status on migrants' consumption in cities. Exploiting the introduction of the new rural pension scheme (NRPS), we perform a difference‐in‐differences (DID) analysis. We find that having a parent in a rural area that is pension eligible increases migrants' consumption level by 9.4%. However, this effect is constrained to survival consumption. Furthermore, the positive impact of parents' pension eligibility is more pronounced for migrants who earn a lower income, receive less education, suffer from poorer health, have stronger economic ties with their parents, and have a parent in poorer health. Our results suggest that improving rural social welfare has a spillover effect on urban consumption.

Land reallocation responses to China's New Rural Pension Scheme: Evidence from a regression discontinuity design

This study examines how labor reallocation has been associated with land reallocation following the implementation of the New Rural Pension Scheme (NRPS) in 2009. Based on data from the China Health and Retirement Longitudinal Survey (CHARLS) gathered during two periods (2013 and 2015), it uses the discrete changes generated by the new program's rules to identify the impact on land reallocation, as represented by the amount of land rented out by the elderly and their spouses. The age 60 NRPS eligibility threshold is associated with large increases in land rented out. The most important channel identified is the increase in the number of adult-children migrants, which reduces the number of farm workers and may help relax credit constraints. In contrast, the NRPS program has had no impact on the extent of elderly labor; there are no changes in their time spent caring for grandchildren or paid work in the labor market. A deeper examination of the welfare effect shows that despite labor and land reallocation, the NRPS has had no impact on either household consumption or elderly well-being. This study contributes to the literature by connecting land (as a factor of production) with the pension scheme, which may have policy implications regarding how money transfer programs would affect land and labor reallocation and individual welfare in other countries in the global context.

Pension Incentives and Retirement Planning in Rural China: Evidence for the New Rural Pension Scheme

This paper estimates the impact of social pension programs on retirement planning in rural China, focusing on the New Rural Pension Scheme (NRPS). Retirement planning is defined as an individual's intention to detach from the workforce at a given age instead of working for as long as physically possible. We also consider an individual's self‐reported health characteristics and subjective life expectancy. Overall, we find that the NRPS does not incentivize younger workers (those under 60 years of age) to plan their retirement; instead, they are more likely to remain in the workforce permanently to compensate for the additional costs. However, the NRPS provides a greater incentive for older workers (those 60 years of age and older) to plan their retirement than if there was no scheme. This result is particularly relevant for older unhealthy workers with a longer subjective life expectancy. We also find evidence that mental health status is key for the effectiveness of the policy.

Reducing Multidimensional Poverty of Elderly: The Role of the New Rural Pension Scheme in China

Poverty is a multidimensional concept. Besides income, it also includes many nonmonetary dimensions, such as education, health, housing, and access to public goods. Applying a nationally representative survey dataset, this study mainly investigates the role of China’s New Rural Pension Scheme (NRPS) in reducing multidimensional poverty among the rural elderly. We first select four dimensions of life quality, health, social inclusion, and subjective welfare to construct multidimensional poverty indicators. We then divide the sample into two parts by age (45–59 and above 60) and evaluate the poverty‐reduction effects of participating behaviors and receiving behavior separately. Moreover, we use the insured subsample to investigate the dynamic influence from insured status on received status. The results showed that, for the 45–59 age group, NRPS participation helped reduce poverty across the given indicators, especially in terms of health, life, and subjective welfare. For the elderly (over 60), receiving the pension effectively reduced poverty. In addition, we found that as age increases, pension income can effectively alleviate the insured subgroup’s multidimensional experience of poverty.

Does pension affect labour supply? New evidence from large-scale rural pension policy reform in China

ABSTRACT Using national longitudinal survey data, we study how the Chinese New Rural Pension Scheme (NRPS) reform affects the rural labour supply structure of individuals aged 20–70. Applying multiple regression approaches, we find NRPS does not significantly affect Chinese rural residents’ weekly working hours, labour force participation, or migration choices; only those aged 50–59 change their labour supply pattern after joining the pension system. Parental pensions motivate adult children to migrate out only when both parents receive pensions. Various factors are explored to understand our findings; the low subsidy that Chinese rural pensioners currently receive is the major factor. These results indicate that from the perspective of improving the welfare of the rural elderly and encouraging the more free flow of young rural labour force, it is necessary to increase the compensation level of NRPS.

Does the New Rural Pension Scheme improve residents' livelihoods? Empirical evidence from Northwestern China.

The sustainable development of pension systems has been investigated from a financial perspective worldwide. However, the pension adequacy and its effect on the sustainability of a national pension system are still understudied. Using actual replacement rate and modified living standards replacement rate, this study empirically evaluates whether China’s New Rural Pension Scheme (NRPS) grants enough livelihood protection for the rural residents in the Northwestern China. The results show that the NRPS fails to meet the basic needs of the elderly people (i.e., age of sixty years or older) or the middle-aged people (forty-five to fifty-nine years old), while it only provides limited protection for the young people (sixteen to forty-four years old). These findings suggest that the current NRPS benefits are very low in the Northwestern China and policy reforms should be further implemented to improve the sustainable development of the New Rural Pension Scheme.