The Impact of Social Pensions on Intergenerational Relationships: Comparative Evidence from China

34 Pages Posted: 1 May 2017

See all articles by Xi Chen

Xi Chen

Department of Health Policy and Management; Yale University - Department of Economics; Yale University - Yale Institution for Social and Policy Studies; IZA

Karen Eggleston

Stanford University - Walter H. Shorenstein Asia-Pacific Research Center (APARC)

Ang Sun

Renmin University of China

Abstract

China launched a new rural pension scheme (hereafter NRPS) for rural residents in 2009, now covering almost all counties with over 400 million people enrolled. This implementation of the largest social pension program in the world offers a unique setting for studying the economics of intergenerational relationships during development, given the rapidity of China's population aging, traditions of filial piety and co-residence, decreasing number of children, and dearth of formal social security, at a relatively low income level. We draw on rich household surveys from two provinces at distinct development stages – impoverished Guizhou and relatively well-off Shandong – to better understand heterogeneity in the impact of pension benefits. Employing a fuzzy regression discontinuity design, we find that around the pension eligibility age cut-off, the NRPS significantly reduces intergenerational co-residence, especially between elderly parents and their adults sons; promotes pensioners' healthcare service consumption; and weakens (but does not supplant) nonpecuniary and pecuniary transfers across three generations. These effects are much larger in less developed Guizhou province.

Keywords: social pensions, intergenerational relationships, regional comparisons, coresidence, old-age care, service consumption, transfers

JEL Classification: H55, I18, J14, R28

Suggested Citation

Chen, Xi and Eggleston, Karen and Sun, Ang, The Impact of Social Pensions on Intergenerational Relationships: Comparative Evidence from China. IZA Discussion Paper No. 10731, Available at SSRN: https://ssrn.com/abstract=2960540

Xi Chen (Contact Author)

Department of Health Policy and Management ( email )

60 College St
New Haven, CT 06520
United States

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

Yale University - Yale Institution for Social and Policy Studies ( email )

77 Prospect Street
New Haven, CT 06520
United States

HOME PAGE: http://isps.yale.edu/team/xi-chen

IZA ( email )

Karen Eggleston

Stanford University - Walter H. Shorenstein Asia-Pacific Research Center (APARC) ( email )

Stanford, CA 94305
United States

Ang Sun

Renmin University of China ( email )

Room B906
Xianjin Building
Beijing, 100872
China

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