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The Heterogeneous Impact of Pension Income on Elderly Living Arrangements: Evidence from China’s New Rural Pension Scheme

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  • Cheng, Lingguo
  • Liu, Hong
  • Zhang, Ye
  • Zhao, Zhong

Abstract

This paper investigates the impact of pension income on living arrangements of the elderly. Taking advantage of a unique opportunity due to the recent establishment and expansion of the New Rural Pension Scheme in China, we explicitly address the endogeneity of pension status and pension income through a fixed-effect model with instrumental variable approach by exploiting exogenous time variation in the program implementation at county level. We find an overall positive effect of pension income on independent living as well as considerable heterogeneity. The positive income effects of the NRPS are concentrated among the elderly with adult children living nearby, of higher socio-economic status, and with better health at baseline; for other groups, the effects are insignificant. We also find that more generous programs exhibit larger effects. Our results highlight that living arrangement is multidimensional in rural China.

Suggested Citation

  • Cheng, Lingguo & Liu, Hong & Zhang, Ye & Zhao, Zhong, 2017. "The Heterogeneous Impact of Pension Income on Elderly Living Arrangements: Evidence from China’s New Rural Pension Scheme," GLO Discussion Paper Series 80, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:80
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    Cited by:

    1. Shu, Lei, 2017. "Essays on retirement income provision," Other publications TiSEM e5dd8c4e-03bf-4ec9-9651-b, Tilburg University, School of Economics and Management.
    2. 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.
    3. AO, Xiang & JIANG, Dawei & ZHAO, Zhong, 2016. "The impact of rural–urban migration on the health of the left-behind parents," China Economic Review, Elsevier, vol. 37(C), pages 126-139.
    4. repec:eee:joecag:v:8:y:2016:i:c:p:76-84 is not listed on IDEAS

    More about this item

    Keywords

    pension income; living arrangements; heterogeneity; China;

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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