Understanding the Factors that Influence Farmers' Pension Insurance in the Context of Agricultural Innovations in China

Abstract

In recent years, there has been a growing trend among farmers to pursue non-agricultural employment, leading to differentiation among farmers. The number of individuals engaged in primary industry occupations has been consistently decreasing. In 2000, the primary industry employed 36.43 million people, whereas in 2021, this number declined to 17.072 million. Simultaneously, the proportion of wage income and property income in the disposable income of rural residents has been steadily increasing, while the proportion of income from primary industry operations has been declining. The proportion of wage income rose from 40.30% in 2015 to 42.00% in 2021, and the proportion of net property income increased from 2.20% in 2015 to 2.5% in 2021. The transfer of land-use rights under household contracts has remained significant. From 2015 to 2021, the total area of land-use rights transferred increased from 446.833 million mu to 556.979 million mu, marking a 24.65% increase. This phenomenon of farm household differentiation and farmland circulation is intensified due to technological innovation in agriculture. Additionally, data from the Statistical Bulletin of Human Resources and Social Security Development indicates that the number of people participating in basic endowment insurance for urban and rural residents reached 547 million by the end of 2021, reflecting an increase of 5.54 million compared to 2020. Out of the total participants, 162 million individuals were actually receiving benefits. Furthermore, in 2021, the basic old-age insurance fund for urban and rural residents had an annual income and expenditure of 533.9 billion yuan and 371.5 billion yuan, respectively, with a year-end balance of 114 million yuan. Addressing the rural pension issue is crucial for the successful implementation of China's rural revitalization strategy and agricultural innovation. Consequently, the impact of agricultural innovation-induced differentiation among rural households on endowment insurance behavior, as well as the role of farmland circulation in this process, have become focal points of current academic research. This study utilizes data from the China Family Panel Studies (CFPS) in 2014, 2016, and 2018 to analyze the influence of farmer differentiation and farmland circulation on endowment insurance. The findings are as follows: Farmer household differentiation has a significantly positive impact on elderly individuals' likelihood of receiving pension insurance. Higher levels of differentiation among farmer households increase the probability of elderly individuals receiving pension insurance. Moreover, farmer household differentiation positively affects the amount of endowment insurance received by the elderly, as increased differentiation levels correlate with higher insurance amounts. The transfer of farmland by farmers mediates the relationship between farmer differentiation and the receipt of pension insurance, albeit partially. Increased levels of differentiation among farmers promote the transfer of cultivated land, which, in turn, enhances the likelihood of receiving pension insurance. The transfer of farmland also mediates the connection between farmer differentiation and the amount of endowment insurance received, resulting in higher insurance amounts as farmer differentiation levels increase. This study is novel as it examines the effects of farm household differentiation and farmland circulation in rural areas of China on endowment insurance behavior, as well as other mediating factors. However, there are limitations in the research model, such as the exclusion of certain variables and factors related to farm household attributes, including the debt of related farm households. Furthermore, future research should focus on exploring the actual mechanisms through which farm household differentiation and farmland circulation impact on endowment insurance behavior.