Leaving Money on the Table? Suboptimal Enrollment in the New Social Pension Program in China

Xi Chen, Lipeng Hu, Jody L. Sindelar

NBER Working Paper No. 24065
Issued in November 2017
NBER Program(s):Economics of Aging, Development Economics, Health Economics, Public Economics

China’s recently implemented New Rural Pension Scheme (NRPS), the largest social pension program in the world, was designed to provide financial protection for its rural population and reduce economic inequities. Yet the impact of this program is mitigated if those eligible fail to enroll. This paper examines the extent to which pension-eligible individuals, and their families, make optimal pension decisions. Families are involved in the NRPS decisions because, in most cases, adult children need to enroll as a prerequisite of their parents’ receipt of benefits. We examine the decisions of both those eligible for pension benefits (i.e. over 60 years old) and their adult children. We use the rural sample of the 2012 China Family Panel Study to study determinants of the decision to enroll in NRPS, premiums paid, and time taken to enroll. We find evidence of low and suboptimal pension enrollment by eligible individuals and their families. Suboptimal enrollment takes various forms including failure to switch from the dominated default pension program to NRPS and little evidence that families make mutually beneficial intra-family decisions. For the older cohort, few individual and family characteristics are significant in enrollment decisions, but village characteristics play an important role. For the younger cohort, we find that more individual-level characteristics are significant, including own and children’s education. Village characteristics are important but not as much as for the older cohort.

download in pdf format
   (1096 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w24065

Published: Xi Chen & Lipeng Hu & Jody Sindelar, 2019. "Leaving Money on the Table? Suboptimal Enrollment in the New Social Pension Program in China," The Journal of the Economics of Ageing, . citation courtesy of

Users who downloaded this paper also downloaded* these:
Galama, Morgan, and Saavedra w24090 Wealthier, Happier and More Self-Sufficient: When Anti-Poverty Programs Improve Economic and Subjective Wellbeing at a Reduced Cost to Taxpayers
Rau, Sarzosa, and Urzúa w23911 The Children of the Missed Pill
Brown, Kapteyn, Luttmer, Mitchell, and Samek w24101 Behavioral Impediments to Valuing Annuities: Evidence on the Effects of Complexity and Choice Bracketing
McGeary, Dave, Lipton, and Roeper w23995 Impact of Comprehensive Smoking Bans on the Health of Infants and Children
Asquith, Goswami, Neumark, and Rodriguez-Lopez w24080 U.S. Job Flows and the China Shock
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us