Impact of New Rural Pension Insurance on Farmers’ Agricultural Mechanization Service Inputs

Abstract

The rural social security system is a crucial guarantee for the purpose of transforming agricultural production methods. This research assesses how the new rural pension insurance (NRPI) alters the farmers’ agricultural mechanization service (AMS) inputs. Using the 2016 and 2018 waves of the China Family Panel Studies (CFPS), the study observed that NRPI significantly increased farmers’ AMS inputs. Participation in the NRPI could increase AMS inputs by 18.6% and 13.2% for households with and without elderly farmers, respectively. Both grandchild care and labor off-farm transfer were significant in mediating the relationship between NRPI and AMS inputs with elderly farmers, accounting for 13.72% and 9.13% of inputs, respectively. Furthermore, for families without elderly farmers, the mechanism tests suggest that the crowding-out effect of labor off-farm transfer was a fundamental transmission mechanism for the NRPI to contribute to the increase in AMS inputs, with a proportion value of 15.41%. Additionally, the heterogeneity analysis demonstrated that for households with elderly farmers, the NRPI had a more evident effect on the AMS inputs of the farmers with grandchild care, as well as a low proportion of non-agricultural labor transfer and a high level of agricultural income. For households without elderly farmers, the NRPI’s promotion effect on the investment in AMS inputs was more significant when there was a low proportion of non-agricultural labor transfer and for farmers with low levels of agricultural income. The conclusion provides references for improving NRPI and promoting the promotion of AMS and sustainable agricultural development.