Narrowing Consumption Inequality through a Silver Lining: Evidence from Rural China

Population aging is transforming rural households across developing countries, yet limited evidence exists on how it reshapes consumption across the distribution. This study examines the association between household aging and per capita consumption in rural China using 350,351 household-year observations from the Fixed Observation Rural Survey for 2003–2022. We measure household aging as the share of members aged 60 or above within the realized household consumption unit, capturing demographic change as it is experienced in rural households shaped by migration and co-residence. Empirically, we combine household fixed-effects models with unconditional quantile regressions to estimate both average and distributional associations. We find that household aging is associated with lower per capita consumption and that the negative association becomes substantially stronger toward the upper tail of the distribution, indicating compression from above rather than improvement at the bottom. Category-specific results show that contraction is concentrated in discretionary and relatively income-elastic spending, whereas health expenditure is comparatively rigid and may increase with aging. Additional analyses suggest that this pattern is consistent with declines in income capacity, asset-based wealth and informal support. Larger households and households with more farmland exhibit weaker agingrelated consumption losses. The findings show that population aging is reshaping not only average demand but also the composition and distribution of rural consumption under incomplete welfare provision, and they highlight the importance of household structure and rural resource buffers in shaping how aging is lived and managed in the countryside.