Abstract: Taking the panel data of 135 counties (cities or districts) of Shandong province from 2007 to 2012 as samples, this paper makes a systematical analysis of the impact of the New Rural Pension System (NRPS) on the consumption of rural residents and its mechanism; on this basis it conducts an empirical test with the difference–in-difference estimation method. The results show that the NRPS has significant stimulatory effects on the consumption of rural residents; the further analysis of the affecting mechanism indicates that NRPS can increase the consumption mainly through increasing the consuming willingness of the rural residents, but has no significant effects on their consumption ability. The policy effects of NRPS are highly time-sensitive, mainly occurring in the second year of the pilot. However, along with the increased pilot time, the relationship between payment and benefits becomes more explicit, the stimulating effect of NRPS on consumption fades away gradually. The results of regional sub-sample study indicate that the pilot NRPS can generate impact on the consumption of rural residents mainly at the inland areas where the social endowment foundation is vulnerable.

Key words: the new rural pension system; consumption of rural residents; difference-in-difference estimation