Abstract: Based on the data of China Health and Retirement Longitudinal Study (CHARLS) in 2015, this paper makes an analysis of the impact and its action mechanism of the basic old-age insurance for China’s urban and rural residents and non-farm employment on the income disparity of rural households by using the methods of ordinary least squares regression (OLS) and quantile regression. In general, the basic pension insurance has a significant effect on the income distribution of farmers, especially for lower-income farmers, the“pro-poor effect”is significant, which reflects that the old-age insurance can indeed reduce the income inequality among farmers in China. From the point of view of the regression of different points of farmers’ income, non-agricultural employment has a strong heterogeneity effect on farmers with different income status, that is, with the increase of the points of farmers’ income, it presents the inverted U-shaped curve characteristics of“first growth then decline”; and the income distribution effect of the middle and higher-end income farmers is the most significant, while that of the lower-income farmers is not obvious.

Key words: old-age insurance; non-agricultural employment; income effect; income difference of farmers