Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/124888 
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers No. 9360
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Transitioning into retirement is an under-researched phenomenon in developing countries. Largely, this is linked to a predominance of contexts where – in particular – the rural population remains outside the coverage of any formal pension system. In 2008, China introduced the New Rural Social Pension (NRSP), a program which by now covers the majority of the Chinese rural elderly. This paper examines the effects of the NRSP on the labor supply of the elderly in rural China. As pension benefit eligibility at the time of its implementation is conditional on age, a regression discontinuity design is applied to investigate the casual effect of the receipt of pension benefits on labor supply. Furthermore, as the NRSP is neither means-tested nor conditions on retirement, it induces a pure income effect on employment. Using data from the China Health and Retirement Longitudinal Study, a nationally representative data set, we find that the receipt of pension benefits increases the probability of retirement among the rural elderly by around 15%.
Subjects: 
China
New Rural Social Pension
labor supply
regression discontinuity
retirement
JEL: 
H55
J26
Document Type: 
Working Paper

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