Who Does “Endowment Insurance†Support: The Elderly or Their Grown-up Children?

This research paper seeks to understand whether the current basic endowment insurance policy has properly played the role of supporting the elderly needs through intergenerational support within the family. Theoretically, there are problems of the imbalanced structure of pension security, retirees’ comparatively higher pension and the low-level security of young people’s in-service income, and drawbacks of the existing endowment insurance system, both have a certain causal relationship with “gnawing the old.†Data on China’s family tracking survey in 2016 (CFPS2016), Probit model, IV and PSM robustness testing methods were also used to study the relationship between parents’ pensions and their grownup children’s “gnawing-the-old†behavior. The results show that: (1) Compared with young people from families without pension income, those with pensioned parent(s) will less possibly choose to work; the parents’ financial assistance behavior would restrain the children’s intention to work and increase the possibility of “gnawing the old†; (2) Neither the amount of pension income nor financial assistance given to the children is significantly related to young people’s “gnawing the old†; (3) Young people’s “gnawing the old†behaviors are different according to their parents’ professions and living areas; (4) The gap between parents’ pension income and children’s in-service income also adds to the causes of “gnawing the old.†The policy implications of these findings are discussed particularly the formulation of a scientific mechanism for pension income.