Parents' pension eligibility and migrant consumption in urban China: Evidence from a quasi-experiment

Abstract

This article analyzes data from the 2009 and 2014 waves of the Survey on Rural Urban Migration in China (RUMiC) to investigate the impact of parents' pension status on migrants' consumption in cities. Exploiting the introduction of the new rural pension scheme (NRPS), we perform a difference-in-differences (DID) analysis. We find that having a parent in a rural area that is pension eligible increases migrants' consumption level by 9.4%. However, this effect is constrained to survival consumption. Furthermore, the positive impact of parents' pension eligibility is more pronounced for migrants who earn a lower income, receive less education, suffer from poorer health, have stronger economic ties with their parents, and have a parent in poorer health. Our results suggest that improving rural social welfare has a spillover effect on urban consumption.