Old Farmer Pension Program and Farm Succession

Evidence from a Population-Based Survey of Farm Households in Taiwan

Chang, Hung-Hao

Hung-Hao Chang is an associate professor in the Department of Agricultural Economics at the National Taiwan University. The author thanks Richard Boisvert, David Zilberman, Hisham El-Osta, Jiun-Hao Wang, two anonymous reviewers and the journal editor for helpful comments and suggestions. Gratitude is also extended for the technical assistance provided by the Council of Agriculture and the Directorate-General of Budget, Accounting and Statistics in Taiwan for constructing the dataset. This project was supported by the National Science Council of Taiwan under Grant No. NSC99-2410-H-002–063. The views expressed herein are those of the author and do not reflect the policies of the Council of Agriculture and the Directorate-General of Budget, Accounting and Statistics in Taiwan. All remaining errors are the author’s.

American Journal of Agricultural Economics 95(4):p 976-991, July 2013. | DOI: 10.1093/ajae/aat004

This article examines the effect of the old farmers’ pension program on farm succession in Taiwan. Using an agricultural census survey of 160,380 crop farms in 2005 and an analytical framework of regression discontinuity design, we find evidence that the pension program induced elderly farmers to work more on the farm and less off the farm. Although the primary policy objective of the pension program is to secure the well-being of elderly farmers, an undesired negative effect on farm succession is found.