Research On The Impact Of China’s Rural Pension Insurance To Household Income Inequality

As socialism enters a new era,the principal contradiction in society has evolved into one between unbalanced and inadequate development and the people’s ever-growing needs for a better life.The problems of "deteriorate social strata,excessive income disparity,and unfair income distribution" have directly hindered the people’s increasing needs for a better life and the full realization of the strategic goals of rural rejuvenation.Especially in the context of rapid population aging,inadequate pension insurance and imbalanced income distribution have become important signs of imbalanced development in rural China.Despite the improvement of rural income distribution in recent years,rural pension issues and income distribution are still the most sensitive "nerves" of farmers.In the crucial period of decisive battle in building a well-off society,the report of the Nineteenth National Congress of the Communist Party of China clearly stated that “ensures and improves people’s livelihood in development”,“fulfills the function of government redistribution,accelerates the equalization of basic public services,and narrows the income distribution gap.” The Fourth Plenary Session of the 19 th CPC Central Committee further emphasized the need to “continuously improve the overall livelihood security system and meet the people’s growing needs for a better life.” Therefore,the reform of rural income distribution and the improvement of rural pension insurance have become the focus of government work.Rural pension insurance,as an institutional "cornerstone" for coordinating livelihood security and an important "hands-on" for government redistribution policies,should become a necessary choice to narrow the continuous increasing rural income distribution gap and relieve major social conflicts of insufficient imbalance in the new era.As a farmers’ livelihood policy,how to further play the income redistribution function of China’s rural pension insurance policy in an orderly way,and then realize the integration of farmers’ short-term survival quality and long-term development ability,which is still worthy of in-depth study.This thesis takes the objective "agricultural household" as the basic research unit,and then employs some empirical models to evaluate the efficiency of China’s rural pension insurance policy on the household income inequality and its mechanism,and provides rigorous evidence for optimizing income redistribution.Through the theoretical explanation and empirical analysis,the main conclusions are as follows:First of all,the thesis finds that the rural pension insurance system has changed from a simple financial mode of individual account accumulation to a mutual helping mode-"social account system",which has gone through three major institutional changes of "gradual formation","reform and development",and "deepening reform".Meantime,China’s rural pension insurance has changed from the "Rural Social Insurance System(RSIS)" aiming at "ensuring the basic life of the elderly",to the "New Rural Pension System(NRPS)" model configured as "basic,wide coverage,flexible and sustainable",and then to the "Basic Pension System for Urban and Rural Residents(BPSURR)" model configured as "full coverage,basic,flexible and sustainable".However,the existing pension system still faces some challenges,and it is necessary to explore its balanced mechanism.Secondly,based on the perspective of institutional change and China Household Finance Survey(CHFS),a dynamic assessment of the income redistribution effect of China’s rural pension system from the aspects shows that: Participation contributions generally caused “reverse redistribution” of income inequality among farmer,while pension payment show a positive regulatory effect on household income inequality.The redistribution influence of pension payment has always shown a positive effect and "pro-poor" effect.The group tests further found that the payment of pension insurance reduce the income inequality,especially improve the income distribution of low-and middle-income families.From the perspective of institutional change,the results show that the positive redistribution effect of BPSURR pension payment on income inequality is stronger compared with NRPS,while the MT index of pension participation contribution presents a volatility trend,and the negative redistribution effect of participation contribution on low-income group changed.The "net" effect of rural pension insurance increases after institutional change,which further proves the positive redistribution effect of pension insurance.Therefore,improving the substantial fairness of participation contribution and pension payment is crucial.Thirdly,this thesis uses the relative income deprivation index and the data of CHFS to measure the individual income inequality of farmers,and then analyses the effect of current pension insurance system on household income inequality,and reexamines the heterogeneity effects.The results show that: The influence of rural pension system on the household income distribution is significantly positive,and on the individual relative income inequality has "restraining effect".Relatively speaking,the degree of income inequality of farmers who participating in the pension insurance system is lower,and the research conclusion is still established after using the instrumental variable method to eliminate endogenous problems.China’s rural pension insurance system can significantly inhibit the relative deprivation in income.The more the pension,the higher the contribution level,and the lower the individual income inequality of farmers.The heterogeneity research shows that the suppression effect of the pension insurance system on income inequality of farmers in the "east-" “poor-” and "elderly-" groups is more obvious.In addition,participation in the rural pension insurance system has a significant "income effect" on farmers(especially the elderly farmers).Considering the sample selection bias,the research conclusion is still valid.The test results of the panel quantile regression model show that China’s rural pension system can narrow the income distribution gap between different classes by increasing the income level of the insured families,which further inhibit the household income inequality.Therefore,China’s rural pension insurance system has an important impact on household income inequality.Fourthly,based on the perspective of labor and employment,the thesis uses fixed effect model combined with the chain multiple intermediary model and the multi-group structural equation model to examine the indirect mediating effect of China’s rural pension insurance on the household income inequality.The results show that: China’s rural pension insurance system can not only directly decrease the income inequality of farmers,but also produce indirect effect to curb the income inequality of farmers.The indirect effects of rural pension insurance system through farmers’ livelihood behavior(labor employment)are very hidden and complex.The pension insurance system may weaken the income inequality by increasing the employment participation rate and promoting non-agricultural employment.Moreover,the intermediary effect of labor employment shows heterogeneity in term of family life cycle.In addition,the introduction of income mobility into the income inequality analysis framework further confirmed the intermediary role of labor employment,which can be manifested as four intermediary paths: pension insurance → labor employment → income mobility;labor employment → income mobility → income inequality;pension insurance → income mobility → income inequality;pension insurance→ labor employment → income inequality.In conclusion,the empirical and redistribution effect analysis show that the regulatory effect of rural pension insurance system on the income inequality is not only the direct redistribution effect,but also the indirect impacts of household livelihood behaviors,which may significantly affect the household income inequality.Moreover,the influence mechanism of China’s rural pension system can be summarized as follows: "pension income → income redistribution,income gap → household income inequality”;" rural pension insurance → labor employment → income distribution and income mobility →household income inequality”.Therefore,the government should focus on the mechanism optimization of rural pension system,and improve the rural income distribution system with consideration of efficiency and equity,and innovate the micro regulation policies of household livelihood development,and targeting on the inequality of household endowment to reducing the income inequality.Based on the above analysis,this study proposes that government should further give full play to the productivity effect of narrowing the income inequality and achieve the integration of the short-term household living quality and the long-term sustainable ability.