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Do Social Pensions Help People Living on the Edge? Assessing Determinants of Vulnerability to Food Poverty Among the Rural Elderly

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Abstract

This study investigates the effect of the New Rural Pension Scheme (NRPS) on the ex post food poverty and ex ante vulnerability of the rural elderly across different regions, by applying a nationally representative survey dataset. Using province-specific food poverty lines calculated by a least-cost linear programming approach, the overall estimated vulnerability to food poverty in rural China is 28.7%, with a majority of them being vulnerable due to low expected food expenditure. Regional analysis indicates that more developed regions experience lower food poverty incidence and vulnerability compared with less developed regions. To address the endogeneity of pension payment, a fuzzy regression discontinuity design finds that pension income significantly increased the expected food expenditure amongst the elderly, thus decreasing the vulnerability. Estimation results for heterogeneous groups suggest that the NRPS worked better for the elderly who are chronically poor and those who are vulnerable due to low expected food expenditure.

Résumé

Cette étude examine les effets du nouveau régime de retraite en milieu rural (NRPS) sur la pauvreté alimentaire en aval et, en amont, sur la vulnérabilité des personnes âgées en milieu rural dans différentes régions, en appliquant un ensemble de données d’enquête représentatif au niveau national. En utilisant des seuils de pauvreté alimentaire spécifiques à chaque province calculés selon une approche de programmation linéaire au moindre coût, la vulnérabilité globale à la pauvreté alimentaire en Chine rurale est estimée à 28,7%, la majorité d’entre eux étant vulnérables en raison de faibles dépenses alimentaires prévues. Une analyse régionale indique que les régions plus développées connaissent une incidence et une vulnérabilité de la pauvreté alimentaire plus faibles que les régions moins développées. Pour remédier à l’endogénéité des paiements de retraite, la méthode de la régression avec discontinuité floue a montré que les revenus de la retraite augmentaient de manière significative les dépenses alimentaires prévues chez les personnes âgées, réduisant ainsi la vulnérabilité. Les résultats des estimations pour des groupes hétérogènes suggèrent que le NRPS a mieux fonctionné pour les personnes âgées chroniquement pauvres et vulnérables en raison de faibles dépenses alimentaires prévues.

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Notes

  1. Global AgeWatch Index 2015 Insight report, HelpAge International.

  2. China Statistical Yearbook, 2016.

  3. 1 USD = 6.07 CNY (2013).

  4. The subsidies are financed by both local and central government. The percentage of premium subsidy provided by the central government varies across provinces based on economic status. Generally, this percentage can be classified into four categories: 20%, 40%, 60%, and 80%, with the remainder being covered by local government; For example, if an individual selects the 100 CNY premium, he/she will get the minimum amount of premium subsidy, viz. 30 CNY. Given that the percentage of subsidy covered by the central government is 80%, the subsidy from the central government will be 24 CNY (30 × 80% = 24 CNY) while the remaining 6 CNY will be paid by local government.

  5. As the life expectancy in 2009 was 71.5 years in China, the average duration of benefits is 11.5 years, or 139 months, for a 60-year old individual.

  6. Data sourcehttp://www.mohrss.gov.cn/ncshbxs/NCSHBXSgongzuodongtai/201305/t20130531_104217.html.

  7. Food expenditure defined in this study includes both food consumed from own production and food purchased from the market. Nonfood expenditure consists of expenditure on clothing and bedding, travel, heating, consumption of durable goods, education and training, medical treatment, fitness, beauty, automobiles, property management fees, and donations.

  8. According to the 2016 Dietary Guidelines, Chinese residents are recommended to consume 25–30 g of cooking oil, no less than 300 g of dairy products, no less than 25 g of soyfoods, 40–75 g of meat, 40–75 g of fish or shrimp, 40–50 g of eggs, 300–500 g of vegetables, 200–350 g of fruit, and 250–400 g of cereals.

  9. Data for food calories are obtained from The Composition of Chinese Foods (Yang et al. 2009).

  10. Some local governments pay the pension every month, but many local governments prefer to pay at the end of each season or at the end of the year.

  11. Different thresholds of energy intake are accepted in different studies. The World Health Organization considers 2850 kcal as the required daily intake. Masood et al. (2016) applied 3000 kcal and Zereyesus et al. (2017) used 2900 kcal as the minimum daily energy intake for a moderately active adult equivalent.

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Funding

This study was funded by National Natural Science Foundation of China (71503181).

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Authors and Affiliations

  1. College of Economics and Management, Shandong Agricultural University, 61 Daizong St, Tai’an, Shandong, China

    Zhaohua Zhang

  2. School of Economics and Management, Guangxi Normal University, 15 Yucai Road, Guilin, Guangxi, China

    Yuxi Luo

  3. Division of Agriculture and Natural Resources, University of California, San Diego, CA, USA

    Derrick Robinson

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  1. Zhaohua Zhang
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Correspondence to Zhaohua Zhang.

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Table 7 Adult-equivalent scale
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Zhang, Z., Luo, Y. & Robinson, D. Do Social Pensions Help People Living on the Edge? Assessing Determinants of Vulnerability to Food Poverty Among the Rural Elderly. Eur J Dev Res 32, 198–219 (2020). https://doi.org/10.1057/s41287-019-00226-2

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