Research On Fiscal Subsidy Policy Of New Rural Pension Sheme

Social pension insurance, being one of the key contents of social security system, is a vital institutional arrangement to avoid the risk of senior citizens’ income declining accompanied with retirement, and to secure their basic living standards. After the founding of the People’s Republic of China, social pension insurance system have gradually built completely in the town, while rural areas, seriously have been lagging behind. Under the background of aging in rural population, coring in family structure and weakening in land secure function, exploration of rural pension insurance was even started in the1980s, however, the process of development is very slow for lack of subsidy from government.Under this new situation, in September2009, The State Council issued the "guiding opinions of the State Council on carrying out the New Rural Pension Scheme pilot"(referred to as the "guidance"), and decided to carry out NRPS from2009, which indicates a new era in the development of China’s rural social security. What’s new for NPRS lies in establishing government’s main body status in raising money for the first time, in comparison to the former rural pension scheme, especially in the responsibility of fiscal subsidy. In recent years, the pilots of NRPS make great strides in development under the support of fiscal subsidy, with a basic full system coverage in2012, nearly ten years earlier than the expected time. We may say, as a necessary part of the new rural pension scheme, establishment of fiscal subsidy policy of NRPS is not only served to alter the psychological expectations, and promote the equalization of public services in urban and rural areas, but to increase the income of rural residents, and to deal with the aging of the population also.However, any public policy can be a double-edged sword, as the case of fiscal subsidy in NPRS. If unproperly formulated, the fiscal subsidy policy would have serious negative impact and prevent NRPS from a sustainable development. Especially, the policy of fiscal subsidy is confirmed lately. There is only a short period of four years for the government really commit to institutionalized text to subsidize the rural residents, in consequence, the current understanding on this new policy still remains to be further both in theory and practice. Based on this, this paper sets the fiscal subsidy policy of NRPS as the object of study, developing it on a logic of "analysis of the literature→construction of the theoretical framework→an empirical analysis on NPRS→policy optimization", with a comprehensive use of different research paradigm in variable subjects such as public economics, public policy and manegement science. This paper also gathers data from the pilot questionnaires in Henan province, takes into account of the fiscal subsidy policy of NRPS, and conduct a deep and systematic research from two aspects of rural residents and the government.This paper is divided into9chapters, and the main contents of each chapter are as follows:Chapter one is the Introduction. The introduction discusses the research background and significance of this topic, defines the related core concepts,and reviews the research status at home and abroad, and shows the research theological of the whole paper. Furthermore, it introduces the research methods adopted, summarizes the innovation of this paper, and pointes out the shortage of this research.Chapter two, the theoretical framework of NPRS. This part provides basis of theoretical analysis and logical thinking for the empirical analysis. Firstly, it explains the theory of public goods, external effect and fiscal subsidy to provide theoretical support for the analysis framework. Secondly, according to the analysis model of public policy system, this article determines the research dimensions of the framework, defines research content and path of each dimension, and then build the new analysis framework for NPRS.Chapter three, evolution and present situation of the fiscal subsidy policy of NPRS. Based on a perspective of government’s responsibilities on fiscal subsidy, the paper divides process of the policy’s development into three stages:lacking phase, exploring phase and establishment phase, and makes an investigation and a summary upon the fiscal subsidy policy in different stages. At the same time, it illustrates the current content of fiscal policy of NPRS, sorts and classifies different basic pension and payment subsidy policies on a basis of different provinces in China. Finally, it looks into expenditure conditions of such policy on national and provincial levels.Chapter four, analysis of the recognition and satisfaction upon the fiscal subsidy policy of NPRS. Based on the data from questionnaires of NRPS first batch pilots in Henan province, this part studies the conditions of recognition and satisfaction of peasants towards the policy. The results show that such recognition mainly is in a stage of "understanding" and recognitive quality is relatively low. Based on Ordered Probit model, it is found that age groups, education, real income and self-reported health in personal characteristics have a significant impact on degree of satisfaction of such policy in which "pension standard recognition" and "government’s responsibility assessment in urban and rural areas" have a positive influence, while "effect evaluation of pension insurance" has a negative one. Therefore, we should innovate means of publicity, strengthen the pertinence, and improve the awareness of the new rural fiscal subsidy policy. At the same time, government should promote peasants’satisfaction by raising the pension treatment standards and ensuring continuity of the new agricultural insurance system.Chapter five, analysis of the fiscal subsidy policy’s effect on behavior of participating NRPS. This chapter, in the beginning, analyzes the current conditions on insurance fee-charging standards, from the macro and micro level, discovering the universal phenomenon for rural residents to choose low payment standard insurance. After an investigation into the payment ability of rural residents who participate in insurance, we find out that key factors attributing to low payment standard are not about payment ability. By building a project investment earnings pattern, we analysis the relative influence of "one size fits all" and "differentiation" payment-subsidy policy on the return rates of different payment levels, and the results show both the negative incentive effect, which means that the new agricultural payment-subsidy policy induces and aggravate the low grade insurance behavior. To encourage rural residents to choose higher payment standards, policy makers could change setting quota system into ratio quota system and continuously increases the peasants’income.Chapter six, analysis of the fairness of sharing responsibilities on raising money for fiscal subsidy of NPRS. First of all, this part explains the theory of shared responsibilities between multistage governments on NPRS. Next, make an equity consideration of the central government’s money raising responsibility sharing policy. Finally, summarize the three types of local government’s policy on sharing responsibility, namely, all the same type, differential regarded type, and behave accordingly type, on a basis of that, this chapter looks upon equity degrees of the three kinds of type. Results show that current fiscal subsidy policy in financing and share responsibility has certain unfairness, thus grass-root governments who have high proportion of rural population, and relatively weak funding resources, have to bear heavy responsibility of funding. Therefore, superior governments should ensure the fairness of financing share responsibility by making allowance distributing formula to determine the amount of subsidies on a basis of a series of objective economic and social indicators for key parameters that grass-root government fiscal income within the administrative areas, agricultural population scale, and fiscal income per capita and so on.Chapter seven, analysis of the efficiency of the fiscal subsidy expenditure. To account this kind of efficiency, this chapter introduces the data envelope analysis method, bases on CCR model and BCC model, respectively, and estimates three kinds of efficiency scores, total efficiency(TE), pure technical efficiency(PTE), and scale efficiency. The research results show that there exists a significant difference in subsidy expenditure efficiency of governments in different sections or provinces.On this basis, slack variables and projection value of each decision making unit are respectively calculated. Meanwhile, the paper analyzes the influencing factors affecting efficiency of the fiscal subsidy expenditure through a further Tobit model about random effects, by using total technical efficiency scores. Empirical results show that the proportion of provincial rural population to nationwide total population, per capita GDP have a weak negative influence on new agricultural fiscal subsidy efficiency, whereas per capita fiscal income maintains positive influence. Area and fiscal subsidy policy, as two virtual variable, have on significant effect on expenditure efficiency.Chapter eight, study on the sustainable ability of the fiscal subsidy payment. This chapter examines systematically the sustainable ability of the fiscal subsidy payment condition in China from time and space aspects, based on both supply and demand perspectives, which shows, under current framework of NRPS, both central and provincial governments, the East and Midwest areas have sustainable payment ability, especially that of central government, whose basic pension standard may be further improved. Taking future pension adjustments into consideration, on the whole, payment ability in China is sustainable, with the east provinces have a stronger one compared to Midwest. Central government may account with certain pressure in payment, but critical line is not surpassed. As long as the better future for China’s economic development fundamentals, payment ability would remain sustainable.Chapter nine, propose the main conclusion, policy recommendations, and research prospects. On the basis of what have been researched, this part summarizes main conclusion of the full text, puts forward some suggestions to perfect the new agricultural fiscal subsidy policy, and finally points out future research direction.The innovation of this paper lies in the following aspects:First of all, construct the theory analysis framework for the fiscal subsidy policy of NPRS. At present, relating research is in some extent fragmented, has not yet established a systematic framework, which restricts a comprehensive and in-depth research. Based on public policy analysis model, revolving around the NPRS fiscal policy, this article fits two main bodies of rural residents and government into the structure, breaking the bondage of former research paradigms to separate these two bodies and analyze separately. By introducing two paradise lines of research, namely, rural residents dimension, based on policy object and government dimension as the second, policy subject, it realizes a systematic research on the fiscal subsidy policy.Secondly, in the aspect of participating insurance behavior of rural residents, this paper describes the phenomenon of low payment standard insurance in the pilot, breaking through the past practice that only consider whether rural residents take part in insurance, and studies in-depth the internal influence mechanism of the incentive mechanism effect of the fiscal policy on such behavior.Last but not least, in summing up types of responsibility share policy, it analyzes its equity between central and local governments, realizing a refinement and deepening to the existing research. As fiscal subsidy expenditure efficiency calculation is a key problem for the present research, and most existing literatures take a qualitative perspective to explore such a question, this paper tries to quantify expenditure efficiency by using data envelop analysis method, which enriches the content of existing research.