Zhang, Chuanchuan (2011): Children, support in old age and social insurance in rural China.
Download (397kB) | Preview
Most people in rural China have no plans for retirement other than the ingrained Chinese tradition that children care for old parents. Actually there are also no sources of social support such as social old-age insurance to rely on in rural people’ old age for a long time in China. In 1992, a social old-age insurance program, rural pension program, was initiated by the Chinese government to firstly establish a social security system in China’s rural area. The rural pension program experienced rapid development in the beginning years but grounded to halt after 1998. Since either children or pension program provides support for elderly, we expected that these two can be viewed as substitutes to some extent. Using data from China’s 2005 mini-census, we find that rural people who have at least one son are less likely to participate in pension program and each additional son and daughter both decreases their participation rate. Moreover, the effect of an additional son is much larger than that of an additional daughter. In addition, both evidence from mini-census and China Health and Retirement Longitudinal Study show that peasants accessing to pension are less likely to rely on their children for support in old age. These findings suggest that demand for children, especially for sons are partly driven by concerns relating to care in old age; children and formal social old-age insurance are substitutes for support in old age. We then expect that implementation of social old-age insurance may mitigate rural people’ demand for children, especially sons and thus correct China’s severe sex ratio bias to some extent. We test this hypothesis using the difference-in-differences strategy, and find that increase of sex ratio at the region level slowed down after the implementation of the rural pension program. Overall, our empirical analysis in this paper implies that sex ratio bias is partly due to demanding for sons for support in old age and carrying out social old-age insurance in rural China are helpful in mitigating demand for children and correcting sex ratio bias.
|Item Type:||MPRA Paper|
|Original Title:||Children, support in old age and social insurance in rural China|
|Keywords:||children; rural pension; sex ratio|
|Subjects:||I - Health, Education, and Welfare > I1 - Health > I12 - Health Production
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J38 - Public Policy
I - Health, Education, and Welfare > I3 - Welfare and Poverty > I38 - Government Policy; Provision and Effects of Welfare Programs
|Depositing User:||CHUANCHUAN ZHANG|
|Date Deposited:||02. Apr 2012 13:09|
|Last Modified:||17. Feb 2013 21:19|
Bertrand, Marianne, Sendhil Mullainathan, and Douglas Miller. 2003. “Public Policy and Extended Families: Evidence from Pensions in South Africa.” The World Bank Economic Review 17(1), 27-50.
Chung, Woojin and Monica Das Gupta. 2007. “The Decline of Son Preference in South Korea: The Roles of Development and Public Policy,” Population and Development Review 33(4): 757-783.
Das Gupta, Monica, Zhenghua Jiang, Bohua Li, Zhenming Xie, Woojin Chung and Bae Hwa-Ok. 2003. “Why is Son Preference So Persistent in East and South Asia? A Cross-Country Study of China, India and the Republic of Korea,” Journal of Development Studies 40(2): 153-187.
Duflo, Esther. 2001. “Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment,” The American Economic Review, Vol. 91, No. 4, pp. 795-813.
Ebenstein, Avraham. 2010. “The ‘Missing Girls’ of China and the Unintended Consequences of the One Child Policy,” Journal of Human Resources 45(1): 87-115.
Ebenstein, Avraham and Ethan Jennings. 2008. “The Consequences of the Missing Girls of China,” World Bank Economic Review, Vol. 23, Issue 3, pp. 399-425
Ebenstein, Avraham and Steven Leung. 2010. “Son Preference and Access to Social Insurance: Evidence from China’s Rural Pension Program,” Population and Development Review 36(1): 46-70.
Edlund, Lena, Hongbin Li, Junjian Yi and Junsen Zhang. 2007. “Sex Ratios and Crime: Evidence from China’s One-Child Policy.” IZA DP No. 3214.
Greenhalgh, Suan and Winckler Edwin. 2005. Governing China’s Population, Stanford, CA: Stanford University Press.
Gu, Baochang, Feng Wang, Zhigang Guo and Erli Zhang. 2007. “China’s Local and National Fertility Policies at the End of the Twentieth Century,” Population and Development Review 33(1): 129-47.
Lei, Xiaoyan and Wanchuan Lin. 2009. “The New Cooperative Medical Scheme in Rural China: Does More Coverage Mean More Service and Better Health?” Health Economics 18: S25-S46.
Leisering, Lutz, Sen Gong, and Athar Hussain. 2002. “People’s Republic of China—Old Age Pensions for the Rural Areas: From Land Reform to Globalization,” Asian Development Bank Technical Assistance No. 3607.
Li, Hongbin, Junjian Yi, and Junsen Zhang. 2010. “Estimating the Effect of the One-Child Policy on Sex Ratio Imbalance in China: Identification Based on the Difference-in-Differences.” IZA DP No. 5149.
Li, Shuzhuo, Marcus Feldman, and Xiaoyi Jin. 2004. “Children, Marriage Form and Family Support for Elderly in Contemporary Rural China,” Research on Aging 26(3): 352-384.
Liu, Xingzhu and Huaijie Cao. 1992. “China’s Cooperative Medical System: Its Historical Transformations and the Trend of Development,” Journal of Public Health Policy 13: 501-511.
Ministry of Civil Affairs. 1992. “Basic Program of Rural Old-age Pension at Region Level (Trial) (in Chinese),” Ministry of Civil Affairs, Beijing, China.
Qian, Nancy. 2008. “Missing Women and the Price of tea in China: The Effect of Sex-Specific Earnings on Sex Imbalance,” Quarterly Journal of Economics 123(3): 1251-1285.
Shi, Shih-Junn. 2006. “Left to Market and Family—Again? Ideas and the Development of the Rural Pension Policy in China,” Social Policy and Administration 40(7): 191-806.
State Council. 2009. “Guidance on the Development of New Rural Pension Program Pilot (in Chinese),” State Council, China.
Wang, Dewen. 2006. “China’s Urban and Rural Old Age Security System: Challenges and Options,” China and World Economy 14(1):102-116.
Wang, Guojun. 2004. “Changes in China’s Rural Social Security System (in Chinese),” Zhejiang Journal of Social Sciences 1: 141-145.
Zeng, Yi, Ping Tu, Baochang Gu, Yi Xu, Baohua Li and Yongping Li. 1993. “Causes and Implications of the Recent Increase in the Reported Sex Ratio at Birth in China,” Population and Development Review 19(2): 283-302.
Zeng, Yi. 2005. “Population Aging, Pension Deficits and Old Age Insurance Program in China (in Chinese),” Economic Quarterly 3: 1043-1066.
——. 2007. “Options for Fertility Transition in China,” Population and Development Review 33(2): 215-246.