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Labor Supply Responses to New Rural Social Pension Insurance in China: A Regression Discontinuity Approach

Author

Listed:
  • Chen, Zeyuan

    (Lund University)

  • Bengtsson, Tommy

    (Lund University)

  • Helgertz, Jonas

    (Lund University)

Abstract

Transitioning into retirement is an under-researched phenomenon in developing countries. Largely, this is linked to a predominance of contexts where – in particular – the rural population remains outside the coverage of any formal pension system. In 2008, China introduced the New Rural Social Pension (NRSP), a program which by now covers the majority of the Chinese rural elderly. This paper examines the effects of the NRSP on the labor supply of the elderly in rural China. As pension benefit eligibility at the time of its implementation is conditional on age, a regression discontinuity design is applied to investigate the casual effect of the receipt of pension benefits on labor supply. Furthermore, as the NRSP is neither means-tested nor conditions on retirement, it induces a pure income effect on employment. Using data from the China Health and Retirement Longitudinal Study, a nationally representative data set, we find that the receipt of pension benefits increases the probability of retirement among the rural elderly by around 15%.

Suggested Citation

  • 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).
    • Handle: RePEc:iza:izadps:dp9360
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    References listed on IDEAS

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    Cited by:

    1. Lin, Yujie, 2018. "The Impact of China's New Rural Pension Scheme on Family Labor Supply: Does the Beneficiary's Gender Matter?," 2018 Annual Meeting, August 5-7, Washington, D.C. 274181, Agricultural and Applied Economics Association.
    2. 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.
    3. Westmore, Ben, 2018. "Do government transfers reduce poverty in China? Micro evidence from five regions," China Economic Review, Elsevier, vol. 51(C), pages 59-69.
    4. Shu, Lei, 2017. "Essays on retirement income provision," Other publications TiSEM e5dd8c4e-03bf-4ec9-9651-b, Tilburg University, School of Economics and Management.
    5. Shu, Lei, 2018. "The effect of the New Rural Social Pension Insurance program on the retirement and labor supply decision in China," The Journal of the Economics of Ageing, Elsevier, vol. 12(C), pages 135-150.
    6. Zhaohua Zhang & Yuxi Luo & Derrick Robinson, 2018. "Reducing Food Poverty and Vulnerability among the Rural Elderly with Chronic Diseases: The Role of the New Rural Pension Scheme in China," IJERPH, MDPI, vol. 15(6), pages 1-20, June.
    7. Miguel Ángel Borrella Mas & Mariano Bosch Mossi & Marcello Sartarelli, 2016. "Non-Contributory Pensions Number-Gender Effects on Poverty and Household Decisions," Working Papers. Serie AD 2016-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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    More about this item

    Keywords

    China; New Rural Social Pension; labor supply; regression discontinuity; retirement;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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