Left to Market and Family – Again? Ideas and the Development of the Rural Pension Policy in China

Shi, Shih‐Jiunn

doi:10.1111/j.1467-9515.2006.00533.x

Cited by 61 publications

(43 citation statements)

References 36 publications

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“…During the 1950s through the 1970s, in view of its urban-oriented development strategy and state-owned economy, China's first formal pension scheme mainly covered urban workers, while the rural residents could only depend on their land and families for old-age support (Shi, 2006). In the 1990s, the government attempted to establish some form of rural pension insurance on a pilot basis in some well-off counties, which was financed primarily by individual contributions.…”

Section: Rural Pension System In Chinamentioning

confidence: 99%

The heterogeneous impact of pension income on elderly living arrangements: evidence from China’s new rural pension scheme

et al. 2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 9116 June 2015 ABSTRACTThe Heterogeneous Impact of Pension Income on Elderly Living Arrangements: Evidence from China's New Rural Pension Scheme * 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 social pension system in rural China, we explicitly address the endogeneity of pension status and 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 elderly with easy access to their adult children, possessing higher financial capacity, in less long-term care and psychological need, and having more education are more likely to live independently after receiving pension income. Our results confirm that independent living is a normal good, but highlight that living arrangement is multidimensional in rural China. JEL Classification:J12, H55, I38

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Section: Rural Pension System In Chinamentioning

confidence: 99%

The heterogeneous impact of pension income on elderly living arrangements: evidence from China’s new rural pension scheme

et al. 2017

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“…China's population has been aging rapidly during the past few decades due to a fall in the population growth rate and an increase in life expectancy (see Appendix (Shi 2006). The proportion of rural farmers insured under the program peaked in 1997 at 15.4%, but it declined to around 11% in 2004.…”

Section: The New Rural Social Pension Insurance Program In Chinamentioning

confidence: 99%

Financial Illiteracy and Pension Contributions: A Field Experiment on Compound Interest in China

Song

2015

SSRN Journal

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This paper uses a field experiment to study the relationship between financial literacy and retirement savings in China. When the Chinese government launched a highly subsidized pension system in rural areas in 2009, 73% of households chose to save at a level that is lower than that implied by a benchmark life-cycle model. We test to what extent the low contribution level is due to a fundamental misunderstanding of the nature of compound interest. In a field experiment with more than 1000 Chinese households, we randomly assigned some households to a financial education treatment, emphasizing the concept of compound interest. This treatment increased the pension contribution by roughly 40%. The increase accounts for 51% of the gap between contribution levels in the Control group and those implied by the benchmark model. To pinpoint mechanisms, we elicited financial literacy after the intervention, and added a third group in which we explain the pension benefit in general. We find that the neglect of compound interest is correlated with low contributions to the pension plans in the control group, and that financial education about compound interest does help households partially correct their erroneous understanding of compound interest. Moreover, explaining compound interest increases their ability to translate benefits into their own situation. Welfare analysis suggests that financial education increases total welfare, although the fact that the treatment effects are heterogeneous implies that some households end up saving more than the level implied by the benchmark model. JEL CODES: D03, D14, D91, G23, M31, O16, O33, Q12 Keywords: Pension, Retirement savings, Financial Education, Exponential Growth Bias

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“…In the meantime, the transition from the collective commune system to the "household responsibility system" dismantled the institutional basis for collective-based old age security system in rural China. Rural people had to rely mainly on their own families for old-age support (Shi, 2006). In 1986, the government initiated some pilot projects for reestablishing a rural pension scheme, starting with well-off counties.…”

Section: China's Rural Pension Systemmentioning

confidence: 99%

The health implications of social pensions: Evidence from China's new rural pension scheme

Cheng

Liu

Zhang

et al. 2018

Journal of Comparative Economics

137

103

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SThe The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public.IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 9621 January 2016 ABSTRACTThe Health Implications of Social Pensions: Evidence from China's New Rural Pension Scheme * This paper estimates the causal effect of income on health outcomes of the elderly and investigates underlying mechanisms by exploiting an income change induced by the launch of China's New Rural Pension scheme (NRPS). Using this policy experiment, we address the endogeneity of pension income by applying a fixed-effect model with instrumental variable correction. The results reveal that pension enrollment and income from the NRPS both have had a beneficial impact on objective measures of physical health, cognitive function, and psychological well-being of the rural elderly, and also reduced mortality over a three-year horizon by 6 percentage points. Evidence further suggests that pension recipients respond to the new pension income in multiple ways: improved nutrition intake, better accessibility to health care, increased informal care, increased leisure activities, and better self-perceived relative economic situation. These in turn act as channels from pension income to health of the Chinese rural elderly. JEL Classification:H55, I12, I38, J14

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Left to Market and Family – Again? Ideas and the Development of the Rural Pension Policy in China

Cited by 61 publications

References 36 publications

The heterogeneous impact of pension income on elderly living arrangements: evidence from China’s new rural pension scheme

The heterogeneous impact of pension income on elderly living arrangements: evidence from China’s new rural pension scheme

Financial Illiteracy and Pension Contributions: A Field Experiment on Compound Interest in China

The health implications of social pensions: Evidence from China's new rural pension scheme

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