Subsurface Scattering Shader
Subsurface Scattering (in the following referred to as SSS) is an effect in which light penetrates slightly transparent surfaces, which then virtually transport, scatter and - in part or entirely - absorb and color the light. With slightly transparent is meant every material through which light can pass, however slightly. This includes more materials than you might think. Such materials include porcelain, marble, skin, milk or various plastics, just to name a few.
The SSS Shader is most effectively applied in the Luminance channel.
Standard and Physical Renderer
SSS also works in conjunction with GI, i.e.,light that GI casts onto an SSS object will be included in the calculation. On the other hand, light that is generated by a SSS will only be recognized by other objects when in QMC GI Mode.
Note also the Invert Direction option in the Ambient Occlusion shader; a very similar result can be achieved much faster - albeit without the correct effect.