Reducing Food Poverty and Vulnerability among the Rural Elderly with Chronic Diseases: The Role of the New Rural Pension Scheme in China

Vulnerability to food poverty is the probability of an individual falling below the food poverty line in the near future, which provides a forward-looking welfare analysis. Applying a nationally representative survey dataset, this study investigates the role of the New Rural Pension Scheme (NRPS) in reducing food poverty and vulnerability among the rural elderly with chronic diseases. By designing province-specific food poverty lines to account for variations in the elderly’s needs, as well as the prices across provinces using a least-cost linear programming approach, the food poverty incidences among the elderly with chronic diseases are calculated. Applying a three-stage feasible generalized least squares (FGLS) procedure, the vulnerability to food poverty is estimated. Our results show that food poverty incidence and vulnerability of the elderly with chronic diseases in rural China is 41.9% and 35% respectively, which is 8% and 6% higher, respectively, than the elderly that are in good health. To address the potential endogeneity of pension payment, a fuzzy regression discontinuity (RD) regression is employed to investigate the effects of pension income on food poverty and vulnerability for different population groups. We found that pension income decreases the probability of being food poor and the vulnerability to food poverty among the elderly with chronic diseases by 12.9% and 16.8% respectively, while it has no significant effect on the elderly in good health.