China’s New Rural Pension Scheme is a significant component of the social security system, which is a long-term mechanism for the country to stabilize poverty. Therefore, it is important to explore the impact of China’s New Rural Pension Scheme on the rural elderly’s poverty in China. Based on 2008-2004 Chinese Longitudinal Healthy Longevity Survey （CLHLS） pannel data, this article utilizes the Difference-in-Differences （DID） and Difference-in-Differences Propensity Score Matching （DID-PSM） identification methods to control the endogeneity and sample selection bias of the models. The poverty alleviation performance of China’s New Rural Pension Scheme is comprehensively evaluated in this research. we also try to analyze the potential impact mechanisms. The empirical results show that: （1） The New Rural Pension Scheme has a significant poverty alleviation effect on the rural elderly in China, and the probability of the elderly being in poverty is significantly reduced. However, this policy effect is significantly weakened by crowding out intergenerational transfer payments. （2） China’s New Rural Pension Scheme has significantly improved the subjective welfare level and the life satisfaction of the elderly, but the impact on self-rated health is not significant. （3） Further research highlights that the heterogeneity of poverty alleviation performance of China’s New Rural Pension Scheme is studied according to different marital status, age, regions and eldercare patterns. It shows that the policy effect is significantly heterogeneous for diferent groups, suggesting the heterogeneity of the New Rural Pension Scheme’s effects. The poverty alleviation performance of the elderly is relatively smaller for the central and western regions, the elderly living alone and without spouses. There is a certain deviation from the goal of promoting precision poverty alleviation and equalization of basic public services, which provides a reference for future precision poverty alleviation work. We should explore more accurate subsidy methods and payment settings to improve poverty alleviation performance. It should increase policy inclinations for vulnerable elderly groups and build more fair social security system. At present, with the rapid increase in the coverage of the New Rural Pension Scheme, the income level of the elderly in rural areas has been enhanced, and the probability of the elderly falling into poverty has been reduced. The next step needs to focus on improving the level of the pension and gradually improving the precision poverty alleviation performance of the policy. It is necessary to establish a multi-dimensional assessment system to accurately identify the poor elderly, increasing their pensions. We should dynamically adjust the level of security according to different levels of poverty and gradually balance the gap between urban and rural. To build a more fair social security system will improve the welfare level of the elderly and continuously enhance the people’s sense of happiness and security.
The Impact of China’s New Rural Pension Scheme on the Rural Elderly’s Poverty
Journal of Finance and Economics Vol. 46, Issue 03, pp. 124 - 138 (2020) DOI:10.16538/j.cnki.jfe.2020.03.009
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Cite this article
Zheng Chao, Wang Xinjun. The Impact of China’s New Rural Pension Scheme on the Rural Elderly’s Poverty[J]. Journal of Finance and Economics, 2020, 46(3): 124-138.
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