The Research And Empirical Analysis Of The Impact Of New Rural Social Endowment Insurance On Farmers’ Consumption

New rural social endowment insurance policy is a social security measure to support farmers’ old-aged life further more in our country. The government began to launch the pilot officially in December2009to reduce farmers’ concerns about their aging life, which is widely acclaimed by the community. The academic circle has been always controversial about whether the new rural endowment promote or curb consumption. The paper establishes three models from different levels including Life Circle Model, Difference-in-Difference Model and Structural Equation Modeling to estimate the impact on farmers’consumption comprehensively and explore the implication mechanism deeply, devoting new methods and ideas for the study of the relationship between new rural consumption and consumption.Firstly, the thesis makes regression analysis using the time series data during the exploration to pilot period from1997to2011to improve that new rural endowment insurance can promote farmers’ consumption effectively. If the new rural endowment expense increases by1%, the consumption will increase0.046%correspondingly, which indicates that the new rural endowment insurance can stimulate domestic demand in the country. Secondly, the paper selects Shanxi as a representative province to do comparative study between the pilot and non-pilot areas and build Difference-in-Difference Estimation model. The result shows that the consumption in pilot areas decreases because of the policy, but it will increase2.52%in the pilot areas with better economic condition which shows that new rural endowment insurance has different effects to different areas. Finally, the article combines the social science method with economic method to use Structural Equation Modeling to come to a decision that new rural endowment insurance has both positive and negative impact on farmers’ consumption, increasing consumption by improving the sense of security and income but squeezing out some consumption because of paying the premiums, which shows that although the new rural endowment insurance weakens the uncertainty psychologically, its role in safeguarding remains to be strengthened.After a comprehensive study, the paper recommends to strengthen the implementation of the new rural endowment insurance and innovate the mechanism. The development of rural social security and new rural endowment insurance reflects the government’s concern and attention, and also is the essential backing for the social stability and economic development. The paper puts forward three suggestions:(1) to strengthen the pension management to keep its healthy development,(2) to attach importance to the research of the elderly support system and to give full play to its positive role,(3) to do research of the development of the new rural insurance and to improve the statistics.