Abstract | In response to guarantee basic care demand and improve the welfare of old-age people, the Chinese government launched an innovative program, the New Rural Pension Scheme (NRPS) for rural residents in late 2009, and integrated NRPS with Urban Resident’s Social Pension System in early 2014. In May 2017, 508 million residents enrolled in this pilot progarm, including 159 million elderly aged 60+ who could apply for a pension. Meanwhile, with the industrialization and urbanization, massive prime working-age labor rural-urban migration, exacerbated by a set of laws and regulations and an unprecedented demographic transition, China rural has been undergoing rapid population aging, there exits insufficient labor supply in agriculture production. It means how to increase effectively labor supply in future.
Theoretically, the design of a pension system is not only to meet the basic life for the elderly, but also could reduce their labor supply. To date, large scloars have paid considerable attention to NRPS on the elderly’labor supply,however, their research conclusion is controversial, and very little is known about the relationship between the residents agricultural labor supply behavior and public pension scheme in rural China. To fill this knowledge gap, using pooled data from three waves of the China Health and Retirement Longitudinal Survey (CHARLS) in 2011,2013 and 2015 and an analytical framework of combination of regression discontinuity design and inverse probability weighting and difference in difference method (RD-IPW-DID), this paper examines the effect of the NRPS on individual’s agricultural labor supply behavior including labor participation and actual labor supply.
The paper found that the effect of NRPS on middle and old residents for different health status was difference, but their labor participation and actual labor supply in farm production did significantly increase, which could be benefit to solve the lack of labor supply resulted in agricultural labor aging. The study showed that NRPS not only could meet the basic care for the middle and elderly rural residents but also encourage them enthusiasm and creativity. What’s more, it might provide an important reference for deepening social security system reform and speeding up agricultural development.
This study contributed to the existing literature by evaluating the welfare effect of public pension program on labor supply in farm production so as to enrich policy effect evaluation about NRPS and promote the transformation of agricultural production mode. Also, from empirical perspective, in order to ensure the result credibility, this study used representative national household survey data CHARLS and adopted RD-IPW-DID and experimental measurement methods.
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