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

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  • Chen, Xi

    () (Yale University)

  • Eggleston, Karen

    () (Stanford University)

  • Sun, Ang

    () (Central University of Finance and Economics)

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.

Suggested Citation

  • Chen, Xi & Eggleston, Karen & Sun, Ang, 2017. "The Impact of Social Pensions on Intergenerational Relationships: Comparative Evidence from China," IZA Discussion Papers 10731, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10731
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    References listed on IDEAS

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    Cited by:

    1. Xi Chen & Lipeng Hu & Jody L. Sindelar, 2017. "Leaving Money on the Table? Suboptimal Enrollment in the New Social Pension Program in China," NBER Working Papers 24065, National Bureau of Economic Research, Inc.
    2. Chen, Xi & Wang, Tianyu & Busch, Susan, 2016. "Does Money Relieve Depression? Evidence from Social Pension Expansions in China," IZA Discussion Papers 10037, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    social pensions; intergenerational relationships; regional comparisons; coresidence; old-age care; service consumption; transfers;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy

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