The New Rural Social Pension Insurance (NRSPI) system implemented in 2009 has filled the gap of China’s rural pension system that has been suspended since 1997. In this study, China Health and Retirement Longitudinal Study (CHARLS) 2011 national baseline data was adopted to evaluate the effectiveness of the NRSPI, from the perspective of labor supply. Empirical findings show that the NRSPI has a “crowding-out effect” on the working hours of rural elders. Paticipating NRSPI significantly lower 161 and 82 working hours annually for entire elders and for working elders, respectively. The NRSPI, however, has insignificant impact on the retirement behaviors of rural elders. Furthermore, these crowding-out effects are increasing with the duration of NRSPI participation. The crowing-out impacts of the NRSPI on working hours are also larger, for men and those with poor health, and those with low family income level.