Pension Coverage for Parents and Educational Investment in Children: Evidence from Urban China

49 Pages Posted: 20 Apr 2016

See all articles by Ren Mu

Ren Mu

Texas A&M University - George Bush School of Government and Public Service

Yang Du

Chinese Academy of Social Sciences (CASS)

Multiple version iconThere are 2 versions of this paper

Date Written: October 26, 2015

Abstract

When social security is established to provide pensions to parents, their reliance upon children for future financial support decreases, and their need to save for retirement also falls. In this study, the expansion of pension coverage from the state sector to the non-state sector in urban China is used as a quasi-experiment to analyze the intergenerational impact of social security on education investments in children. In a difference-in-differences framework, a significant increase in the total education expenditure is found to be attributable to pension expansion. The results are unlikely to be driven by other observable trends. They are robust to the inclusion of a large set of control variables and to different specifications, including one based on the instrumental variable method.

Keywords: Capital Flows, Urban Communities, National Urban Development Policies & Strategies, City to City Alliances, Non Bank Financial Institutions, Educational Sciences, Urban Economic Development, Regional Urban Development, Urban Economics, Social Funds and Pensions, Capital Markets and Capital Flows

Suggested Citation

Mu, Ren and Du, Yang, Pension Coverage for Parents and Educational Investment in Children: Evidence from Urban China (October 26, 2015). World Bank Policy Research Working Paper No. 7457, Available at SSRN: https://ssrn.com/abstract=2680469

Ren Mu (Contact Author)

Texas A&M University - George Bush School of Government and Public Service ( email )

TAMU 4220
1004 George Bush Dr West
College Station, TX 77843
United States
979-458-8024 (Phone)

Yang Du

Chinese Academy of Social Sciences (CASS) ( email )

Beijing, 100732
China

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