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The Impact of the New Rural Pension Scheme on Retirement Sustainability in China: Evidence of Regional Differences in Formal and Informal Labor Supply

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  • Benxi Lin

    (School of Economics, Fujian Agriculture and Forestry University, Fuzhou, Fujian 350002, China)

  • Zongjian Lin

    (Zhou Enlai School of Government, Nankai University, Tianjin 300071, China)

  • Yu Yvette Zhang

    (School of Management, Fujian Agriculture and Forestry University, Fuzhou, Fujian 350002, China
    Department of Agricultural Economics, Texas A&M University, College Station, TX 77843, USA)

  • Weiping Liu

    (School of Economics, Fujian Agriculture and Forestry University, Fuzhou, Fujian 350002, China)

Abstract

This paper evaluates the effect of China’s New Rural Pension Scheme (NRPS) on the retirement sustainability in forms of formal labor supply and informal labor supply in terms of care of grandchildren, using data from China Health and Retirement Longitudinal Study (CHARLS). We explore the regional differences of the NRPS effect on labor supply between the West and the other regions of China. Our analysis shows that rural Western China has a more severe problem of “ceaseless toil” compared to the rest of the country. We find that NRPS improves the “ceaseless toil” situation of the Chinese rural elderly especially in Western China. Our results suggest the need to increase the amount of NRPS payment, and to develop a region-specific pension programs in China.

Suggested Citation

  • Benxi Lin & Zongjian Lin & Yu Yvette Zhang & Weiping Liu, 2018. "The Impact of the New Rural Pension Scheme on Retirement Sustainability in China: Evidence of Regional Differences in Formal and Informal Labor Supply," Sustainability, MDPI, vol. 10(12), pages 1-7, November.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:12:p:4366-:d:184977
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