IDEAS home Printed from https://ideas.repec.org/a/kap/reveho/v15y2017i2d10.1007_s11150-015-9304-y.html
   My bibliography  Save this article

Old age pension and intergenerational living arrangements: a regression discontinuity design

Author

Listed:
  • Xi Chen

    (Yale University
    IZA)

Abstract

China launched a pension program for rural residents in 2009, now covering more than 300 million Chinese. This program offers a unique setting for studying the ageing population, given the rapidity of China’s population ageing, traditions of filial piety and co-residence, decreasing number of children, and dearth of formal social security, at a relatively low income level . This paper examines whether receipt of the old-age pension payment equips elderly parents and their adult children to live apart and whether parents substitute children’s time involved in instrumental support to them with service consumption. Employing a regression discontinuity design to a primary longitudinal survey conducted in Guizhou province of China, this paper overcomes challenges in the literature that households eligible for pension payment might be systematically different from ineligible households and that it is difficult to separate the effect of pension from that of age or cohort heterogeneity. Around the pension eligibility age cut-off, results reveal large and significant reduction in intergenerational co-residence of the extended family and increase in service consumption among elderly parents.

Suggested Citation

  • Xi Chen, 2017. "Old age pension and intergenerational living arrangements: a regression discontinuity design," Review of Economics of the Household, Springer, vol. 15(2), pages 455-476, June.
  • Handle: RePEc:kap:reveho:v:15:y:2017:i:2:d:10.1007_s11150-015-9304-y
    DOI: 10.1007/s11150-015-9304-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11150-015-9304-y
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s11150-015-9304-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jensen, Robert T., 2004. "Do private transfers 'displace' the benefits of public transfers? Evidence from South Africa," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 89-112, January.
    2. Anne Case, 2004. "Does Money Protect Health Status? Evidence from South African Pensions," NBER Chapters, in: Perspectives on the Economics of Aging, pages 287-312, National Bureau of Economic Research, Inc.
    3. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    4. Victoria Hosegood & Anne Case & Cally Ardington, 2009. "Labor Supply Responses to Large Social Transfers: Longitudinal Evidence from South Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 22-48, January.
    5. Sebastian Calonico & Matias D. Cattaneo & Rocio Titiunik, 2014. "Robust data-driven inference in the regression-discontinuity design," Stata Journal, StataCorp LP, vol. 14(4), pages 909-946, December.
    6. Case, Anne & Deaton, Angus, 1998. "Large Cash Transfers to the Elderly in South Africa," Economic Journal, Royal Economic Society, vol. 108(450), pages 1330-1361, September.
    7. David Card & Carlos Dobkin & Nicole Maestas, 2009. "Does Medicare Save Lives?," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 597-636.
    8. de Carvalho Filho, Irineu Evangelista, 2008. "Old-age benefits and retirement decisions of rural elderly in Brazil," Journal of Development Economics, Elsevier, vol. 86(1), pages 129-146, April.
    9. Marianne Bertrand & Sendhil Mullainathan & Douglas Miller, 2003. "Public Policy and Extended Families: Evidence from Pensions in South Africa," The World Bank Economic Review, World Bank Group, vol. 17(1), pages 27-50, June.
    10. Hoerger, Thomas J & Picone, Gabriel A & Sloan, Frank A, 1996. "Public Subsidies, Private Provision of Care and Living Arrangements of the Elderly," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 428-440, August.
    11. Alejandrina Salcedo & Todd Schoellman & Michèle Tertilt, 2012. "Families as roommates: Changes in U.S. household size from 1850 to 2000," Quantitative Economics, Econometric Society, vol. 3(1), pages 133-175, March.
    12. Costa, Dora L, 1997. "Displacing the Family: Union Army Pensions and Elderly Living Arrangements," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1269-1292, December.
    13. Edmonds, Eric V., 2006. "Child labor and schooling responses to anticipated income in South Africa," Journal of Development Economics, Elsevier, vol. 81(2), pages 386-414, December.
    14. Esther Duflo, 2000. "Child Health and Household Resources in South Africa: Evidence from the Old Age Pension Program," American Economic Review, American Economic Association, vol. 90(2), pages 393-398, May.
    15. Zachary Zimmer & Julia Kwong, 2003. "Family size and support of older adults in urban and rural China: Current effects and future implications," Demography, Springer;Population Association of America (PAA), vol. 40(1), pages 23-44, February.
    16. Vimal Ranchhod, 2006. "The Effect Of The South African Old Age Pension On Labour Supply Of The Elderly," South African Journal of Economics, Economic Society of South Africa, vol. 74(4), pages 725-744, December.
    17. Guido Imbens & Karthik Kalyanaraman, 2012. "Optimal Bandwidth Choice for the Regression Discontinuity Estimator," Review of Economic Studies, Oxford University Press, vol. 79(3), pages 933-959.
    18. Xiaoyan Lei & Chuanchuan Zhang & Yaohui Zhao, 2013. "Incentive Problems in China’s New Rural Pension Program," Research in Labor Economics, in: Corrado Giulietti & Konstantinos Tatsiramos & Klaus F. Zimmermann (ed.), Labor Market Issues in China, volume 37, pages 181-201, Emerald Publishing Ltd.
    19. Costa, Dora L., 1999. "A house of her own: old age assistance and the living arrangements of older nonmarried women," Journal of Public Economics, Elsevier, vol. 72(1), pages 39-59, April.
    20. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    21. Maitra, Pushkar & Ray, Ranjan, 2003. "The effect of transfers on household expenditure patterns and poverty in South Africa," Journal of Development Economics, Elsevier, vol. 71(1), pages 23-49, June.
    22. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    23. Grant Miller & Diana Pinto & Marcos Vera-Hernández, 2013. "Risk Protection, Service Use, and Health Outcomes under Colombia's Health Insurance Program for the Poor," American Economic Journal: Applied Economics, American Economic Association, vol. 5(4), pages 61-91, October.
    24. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-209, January.
    25. David A. Wise, 2004. "Perspectives on the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise04-1, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Xi & Wang, Tianyu & Busch, Susan H., 2019. "Does money relieve depression? Evidence from social pension expansions in China," Social Science & Medicine, Elsevier, vol. 220(C), pages 411-420.
    2. Zhang, Xin & Zhang, Xiaobo & Chen, Xi, 2017. "Happiness in the air: How does a dirty sky affect mental health and subjective well-being?," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 81-94.
    3. Myerson, Rebecca & Lu, Tianyi & Yuan, Yong & Liu, Gordon, 2020. "The impact of government income transfers on tobacco and alcohol use: Evidence from China," Economics Letters, Elsevier, vol. 186(C).
    4. Jing You & Miguel Niño‐Zarazúa, 2019. "The Intergenerational Impact of China's New Rural Pension Scheme," Population and Development Review, The Population Council, Inc., vol. 45(S1), pages 47-95, December.
    5. Zhaohua Zhang & Yuxi Luo & Derrick Robinson, 2020. "Do Social Pensions Help People Living on the Edge? Assessing Determinants of Vulnerability to Food Poverty Among the Rural Elderly," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(1), pages 198-219, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chen, Xi, 2015. "Old-Age Pension and Intergenerational Living Arrangements," IZA Discussion Papers 9482, Institute of Labor Economics (IZA).
    2. Chen, Xi & Eggleston, Karen & Sun, Ang, 2018. "The impact of social pensions on intergenerational relationships: Comparative evidence from China," The Journal of the Economics of Ageing, Elsevier, vol. 12(C), pages 225-235.
    3. Xi Chen, 2016. "Old-Age Pension And Extended Families: How Is Adult Children'S Internal Migration Affected?," Contemporary Economic Policy, Western Economic Association International, vol. 34(4), pages 646-659, October.
    4. Miguel Ángel Borrella Mas & Mariano Bosch Mossi & Marcello Sartarelli, 2016. "Non-Contributory Pensions Number-Gender Effects on Poverty and Household Decisions," Working Papers. Serie AD 2016-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    5. Ning, Manxiu & Gong, Jinquan & Zheng, Xuhui & Zhuang, Jun, 2016. "Does New Rural Pension Scheme decrease elderly labor supply? Evidence from CHARLS," China Economic Review, Elsevier, vol. 41(C), pages 315-330.
    6. Niu, Chiyu & Arends-Kuenning, Mary, 2016. "No Country for Old Men: An Investment Motive for Downward Inter-generational Transfers in Rural China," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236033, Agricultural and Applied Economics Association.
    7. Pedro Rodrigues de OLIVEIRA & Ana Lúcia KASSOUF, 2012. "Impact Evaluation of the Brazilian Non-Contributory Pension Program Benefício de Prestação Continuada (BPC) on Family Welfare," Working Papers PIERI 2012-12, PEP-PIERI.
    8. Herrmann, Tabea & Leckcivilize, Attakrit & Zenker, Juliane, 2021. "The impact of cash transfers on child outcomes in rural Thailand: Evidence from a social pension reform," The Journal of the Economics of Ageing, Elsevier, vol. 19(C).
    9. Ana lucia Kassouf & Pedro Oliveira, 2014. "Impact Evaluation of the Brazilian Social Programs on Family Welfare," ERSA conference papers ersa14p132, European Regional Science Association.
    10. Alessandro Tondini & Cally Ardington & Ingrid Woolard, 2017. "Public pensions and elderly informal employment: Evidence from a change in retirement age in South Africa," SALDRU Working Papers 206, Southern Africa Labour and Development Research Unit, University of Cape Town.
    11. Vimal Ranchhod, 2017. "Household responses to the cessation of grant income: The case of South Africa's Old Age Pension," SALDRU Working Papers 213, Southern Africa Labour and Development Research Unit, University of Cape Town.
    12. Emma Aguila & Jung Ho Park & Alma Vega, 2020. "Living Arrangements and Supplemental Income Programs for Older Adults in Mexico," Demography, Springer;Population Association of America (PAA), vol. 57(4), pages 1345-1368, August.
    13. Davezies, Laurent & Le Barbanchon, Thomas, 2017. "Regression discontinuity design with continuous measurement error in the running variable," Journal of Econometrics, Elsevier, vol. 200(2), pages 260-281.
    14. Yoichi Arai & Yu‐Chin Hsu & Toru Kitagawa & Ismael Mourifié & Yuanyuan Wan, 2022. "Testing identifying assumptions in fuzzy regression discontinuity designs," Quantitative Economics, Econometric Society, vol. 13(1), pages 1-28, January.
    15. Cristian Pop-Eleches & Miguel Urquiola, 2013. "Going to a Better School: Effects and Behavioral Responses," American Economic Review, American Economic Association, vol. 103(4), pages 1289-1324, June.
    16. Dora L. Costa, 2008. "The Rise of Retirement Among African Americans: Wealth and Social Security Effects," NBER Working Papers 14462, National Bureau of Economic Research, Inc.
    17. Jessica Standish-White & Arden Finn, 2015. "Unconditional cash transfers and children's educational outcomes: Evidence from the old-age pension programme in South Africa ," SALDRU Working Papers 147, Southern Africa Labour and Development Research Unit, University of Cape Town.
    18. Daniel Höhmann, 2017. "The effect of legislature size on public spending: evidence from a regression discontinuity design," Public Choice, Springer, vol. 173(3), pages 345-367, December.
    19. Angelo D'Andrea, 2019. "Mayor’s wage and Public procurement," BAFFI CAREFIN Working Papers 19125, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.

    More about this item

    Keywords

    Rural pension; RD design; Living arrangement; Service consumption;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:reveho:v:15:y:2017:i:2:d:10.1007_s11150-015-9304-y. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.