The Subjective Well-being Effects of Public Pension Integration Reform: Evidence from China

Since its inception, China’s public pension system has been organized into distinct schemes for the public and private sectors, resulting in a pension gap that has spurred various social challenges. In an effort to establish an equitable and unified system, the Chinese government launched a ten-year integration reform in 2014. Drawing on data from retired individuals in the China Family Panel Studies (CFPS) from 2016 to 2022, this study examined the impact of the integration reform on subjective well-being during the reform’s transitional period. The findings indicated that the reform substantially improved the subjective well-being of retired employees in the private sector compared to those in the public sector. Both absolute and relative income effects emerged as key mechanisms through which the reform influenced subjective well-being. Moreover, further analysis revealed that the policy effects were particularly pronounced in rural areas and central-western regions. This study contributes to a deeper understanding of how pension system reforms can promote institutional equity and enhance subjective well-being among the elderly.