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The Impact of Rural Pensions in China on Labor Migration

Author

Listed:
  • Karen Eggleston
  • Ang Sun
  • Zhaoguo Zhan

Abstract

We study the impact of China’s new rural pension program on promoting migration of labor by applying a regression discontinuity analysis to this new pension program. The results reveal a perceptible difference in labor migration among adult children whose parents are just above and below the age of pension eligibility: The adult children with a parent just attaining the pension-eligible age are more likely to be labor migrants compared with those with a parent just below the pension-eligible age. We also find that with a pension-eligible parent, the adult children are more likely to have off-farm jobs. These abrupt changes in household behavior at the cutoff suggest that these households are credit constrained. In addition, we find that the pension’s effect on migration is greater among adult children with a parent in poor health; pension-eligible elderly report that they are more likely to use inpatient services when needed and less likely to rely on adult children for care when they are ill. These results suggest that (expectations regarding) providing care for elderly parents has constrained labor migration from China's rural areas to some extent, and that the new rural pension program has helped to relax this constraint.

Suggested Citation

  • Karen Eggleston & Ang Sun & Zhaoguo Zhan, 2018. "The Impact of Rural Pensions in China on Labor Migration," The World Bank Economic Review, World Bank, vol. 32(1), pages 64-84.
    • Handle: RePEc:oup:wbecrv:v:32:y:2018:i:1:p:64-84.
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    File URL: http://hdl.handle.net/10.1093/wber/lhw032
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    Citations

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    Cited by:

    1. Jules Gazeaud & Eric Mvukiyehe & Olivier Sterck, 2023. "Cash Transfers and Migration: Theory and Evidence from a Randomized Controlled Trial," The Review of Economics and Statistics, MIT Press, vol. 105(1), pages 143-157, January.
    2. Juan Carlos Caro & Marcela Parada‐Contzen, 2022. "Pension Incentives and Retirement Planning in Rural China: Evidence for the New Rural Pension Scheme," The Developing Economies, Institute of Developing Economies, vol. 60(1), pages 3-29, March.
    3. Lugo, Maria Ana & Niu, Chiyu & Yemtsov, Ruslan, 2021. "Rural Poverty Reduction and Economic Transformation in China: A Decomposition Approach," SocArXiv 8rbgw, Center for Open Science.
    4. Chen, Zeyuan & Bengtsson, Tommy & Helgertz, Jonas, 2015. "Labor Supply Responses to New Rural Social Pension Insurance in China: A Regression Discontinuity Approach," IZA Discussion Papers 9360, Institute of Labor Economics (IZA).
    5. Keetie Roelen & Carmen Leon-Himmelstine & Sung Kyu Kim, 2022. "Chicken or Egg? A Bi-directional Analysis of Social Protection and Social Cohesion in Burundi and Haiti," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1216-1239, June.
    6. Selod, Harris & Shilpi, Forhad, 2021. "Rural-urban migration in developing countries: Lessons from the literature," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    7. Chen, Xi & Eggleston, Karen & Sun, Ang, 2018. "The impact of social pensions on intergenerational relationships: Comparative evidence from China," The Journal of the Economics of Ageing, Elsevier, vol. 12(C), pages 225-235.
    8. Maggio, Giuseppe & Veljanoska, Stefanija, 2021. "Would you rather stay? Agricultural Subsidies and Household Migration in Malawi," 2021 Annual Meeting, August 1-3, Austin, Texas 314041, Agricultural and Applied Economics Association.
    9. Chen, Zeyuan & Bengtsson, Tommy & Helgertz, Jonas, 2015. "Labor Supply Responses to New Rural Pension Insurances in China: A Regression Discontinuity Approach," Lund Papers in Economic History 139, Lund University, Department of Economic History.
    10. Jing You & Miguel Niño-Zarazúa, 2017. "Smoothing or strengthening the 'Great Gatsby curve'?: The intergenerational impact of China's New Rural Pension Scheme," WIDER Working Paper Series wp-2017-199, World Institute for Development Economic Research (UNU-WIDER).
    11. Ana P. Canedo, 2023. "The Unintended Effects of Social Pensions on Migration: Evidence from Rural Mexico," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(1), pages 1-25, February.
    12. Qingen Gai & Naijia Guo & Bingjing Li & Qinghua Shi & Xiaodong Zhu, 2021. "Migration Costs, Sorting, and the Agricultural Productivity Gap," Working Papers tecipa-693, University of Toronto, Department of Economics.
    13. Zhaohua Zhang & Yuxi Luo & Derrick Robinson, 2019. "Who Are the Beneficiaries of China’s New Rural Pension Scheme? Sons, Daughters, or Parents?," IJERPH, MDPI, vol. 16(17), pages 1-16, August.
    14. Xing Ji & Jingwen Xu & Hongxiao Zhang, 2022. "How Does China’s New Rural Pension Scheme Affect Agricultural Production?," Agriculture, MDPI, vol. 12(8), pages 1-23, July.
    15. Zhaohua Zhang & Yuxi Luo & Derrick Robinson, 2020. "Do Social Pensions Help People Living on the Edge? Assessing Determinants of Vulnerability to Food Poverty Among the Rural Elderly," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(1), pages 198-219, January.
    16. Jing You & Miguel Niño‐Zarazúa, 2019. "The Intergenerational Impact of China's New Rural Pension Scheme," Population and Development Review, The Population Council, Inc., vol. 45(S1), pages 47-95, December.

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