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Pensions and household consumption in rural China

Pensions and household consumption in rural China PurposeThe purpose of this paper is to examine the new rural social pension program’s effect on household consumption in rural China.Design/methodology/approachThe paper employs field data in Hebei Province and comprehensively applies the ordinary least squares regression model and the difference-in-difference matching method.FindingsThe findings show that participation in the Program may not obviously increase household consumption, rather it significantly inhibits the marginal propensity of young families’ consumption temporarily without an apparent impact on participating households’ consumption.Practical implicationsIn addition to maintain the stability of the basic system framework of the new rural social pension program and preserve or increase the value of the fund under the Program, dynamic adjustments to pension levels should be made as and when appropriate.Originality/valueThe study provides a new empirical evidence for the relationship between the new rural social pension program and consumption and gives insight into potential modifications and improvements to the Program. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Agricultural Economic Review Emerald Publishing

Pensions and household consumption in rural China

Su, Baozhong
China Agricultural Economic Review , Volume 9 (4): 13 – Nov 6, 2017
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13 pages

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1756-137X
DOI
10.1108/CAER-09-2017-0160
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to examine the new rural social pension program’s effect on household consumption in rural China.Design/methodology/approachThe paper employs field data in Hebei Province and comprehensively applies the ordinary least squares regression model and the difference-in-difference matching method.FindingsThe findings show that participation in the Program may not obviously increase household consumption, rather it significantly inhibits the marginal propensity of young families’ consumption temporarily without an apparent impact on participating households’ consumption.Practical implicationsIn addition to maintain the stability of the basic system framework of the new rural social pension program and preserve or increase the value of the fund under the Program, dynamic adjustments to pension levels should be made as and when appropriate.Originality/valueThe study provides a new empirical evidence for the relationship between the new rural social pension program and consumption and gives insight into potential modifications and improvements to the Program.

Journal

China Agricultural Economic Review – Emerald Publishing

Published: Nov 6, 2017

References

  • Influence of the payment under new rural social pension program on consumption and savings
  • The effect of pension plans on aggregate saving: evidence from a sample survey
  • Consumption structure of migrant worker families in China
  • Unemployment insurance and precautionary saving
  • Social security, induced retirement and aggregate capital formation
  • Consistency of the permanent income hypothesis with existing evidence on the relation between consumption and income: time series data
  • Sources of selection bias in evaluating social programs: an interpretation of conventional measures and evidence on the effectiveness of matching as a program evaluation method
  • The effects of the new rural social pension insurance on old aging farmers’ household consumption: evidence from 2011-2013 CHARLS