Social Pensions and Children’s Educational Outcomes: The Case of New Rural Pension Scheme in China

Social pension programs are a popular policy instrument to improve the well-being of the elderly and their households. However, evidence regarding the intra-household spillover effect of social pensions on children’s education remains limited. Using data from the China Family Panel Studies (CFPS), this study empirically examined the associations between the cash transfers from the New Rural Pension Scheme (NRPS) for the eligible older adults and children’s educational outcomes in rural China. The results showed that the NRPS had significant intra-household spillover effects on children’s school enrollment and literacy skills. The findings were robust to a suite of robustness checks. Further, the associations of the NRPS with children’s educational outcomes were stronger for children who were boys, at a younger age, left behind by parents, and lived in economically disadvantaged families. We explored the potential mechanisms and found that the increase of childcare from grandparents and parents, accompanied by the improvement of physical and mental health, as well as learning behaviors of children, were the main possible channels behind the relationships between the NRPS and children’s schooling outcomes. Our findings shed new light on the effects of social pensions in rural China and provide insights on the policy improvement for the human capital development of disadvantaged children in developing countries like China.