Policy Evaluation of China’s New Rural Pension Program: Income, Poverty, Expenditure, Subjective Wellbeing and Labor Supply

Abstract

Using data from China Health and Retirement Longitudinal Study (CHARLS) and employing regression discontinuity method and difference-in-differences strategy, this paper evaluates the policy effects of China’s new rural pension program (NRPP) on income, poverty status, expenditure, subjective wellbeing and labor supply of the rural elderly. Empirical results show that, pension benefits of NRPP significantly increased personal income, decreased the incidence rate of poverty, enhanced subject-wellbeing, and marginally increased household expenditure and decreased labor supply. Further studies show that policy effects are larger and more significant for people with poor health status, suggesting heterogeneity of the policy effects