The Effect of Urban–Rural Pension Insurance Integration on Perceived Social Security Fairness

Abstract

Fairness and sustainability are major concerns in social security reform. In 2014, to reduce urban–rural disparities in pension coverage and benefit levels, China merged the New Rural Social Pension Insurance and the Urban Resident Pension Insurance into the unified Urban and Rural Resident Pension Insurance. Using six waves of the Chinese Social Survey (2006–2019) and a staggered difference‐in‐differences design, this study examined the impact of the reform on perceived fairness of social security. It found an improvement in perceived fairness, particularly for rural residents and older adults. Mechanism analyses suggest that the reform improved perceived fairness through two channels: expanded coverage and improved access enhanced rural residents' perceptions of urban–rural fairness, while higher basic pension levels and stronger fund sustainability increased the benefits received by older adults and, thereby, strengthened their perceptions of fairness. Continued refinement of the pension system, especially through support for vulnerable groups, is essential to promote a more equitable and sustainable social security system.