How Well Do Children Insure Parents Against Low Retirement Income? An Analysis Using Survey Data from Urban China

41 Pages Posted: 19 Apr 2005

See all articles by Fang Cai

Fang Cai

Chinese Academy of Social Sciences (CASS) - Institute for Population and Labor Economics

John Giles

World Bank; IZA Institute of Labor Economics; World Bank - Development Research Group (DECRG)

Xin Meng

Australian National University; IZA Institute of Labor Economics

Date Written: March 23, 2006

Abstract

As population aging becomes more pronounced in the developing world, the uneven implementation of social safety nets raises important questions as to how well traditional family-based mechanisms insure elderly incomes when pension systems fail. Using a unique dataset from a recent household survey conducted in urban China, we find evidence that private transfers respond to low household income of retired workers when income falls below the poverty line. This finding is consistent with an altruistic motive for transfers at low levels of household income. At the same time, however, the transfer reponse to elderly pre-transfer income is not sufficient to fully cover shortfalls that arise with severe pension arrears and low retirement income.

Keywords: Transfers, pensions, retirement, elderly welfare, China

JEL Classification: D64, H55, J14, O12, P35, P36

Suggested Citation

Cai, Fang and Giles, John and Meng, Xin, How Well Do Children Insure Parents Against Low Retirement Income? An Analysis Using Survey Data from Urban China (March 23, 2006). Available at SSRN: https://ssrn.com/abstract=704982 or http://dx.doi.org/10.2139/ssrn.704982

Fang Cai

Chinese Academy of Social Sciences (CASS) - Institute for Population and Labor Economics ( email )

5 Jian-guomen Nei Dajie
Beijing 100836
China

John Giles (Contact Author)

World Bank ( email )

Washington DC
United States

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Xin Meng

Australian National University ( email )

Research School of Economics
College of Business and Economics
Canberra ACT 0200
Australia
+61 26249 3102 (Phone)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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