Do Private Household Transfers to the Elderly Respond to Public Pension Benefits? Evidence from Rural China

Plamen Nikolov and Alan Adelman

MPRA Paper from University Library of Munich, Germany

Abstract: Aging populations in developing countries have spurred the introduction of public pension programs to preserve the standard of living for the elderly. The often-overlooked mechanism of intergenerational transfers, however, can dampen these intended policy effects, as adult children who make income contributions to their parents could adjust their behavior in response to changes in their parents’ income. Exploiting a unique policy intervention in China, we examine using a difference-in-difference-in-differences (DDD) approach how a new pension program impacts inter vivos transfers. We show that pension benefits lower the propensity of adult children to transfer income to elderly parents in the context of a large middle-income country, and we also estimate a small crowd-out effect. Taken together, these estimates fit the pattern of previous research in high-income countries, although our estimates of the crowd-out effect are significantly smaller than previous studies in both middle- and high-income countries.

Keywords: life cycle; retirement; pension; inter vivos transfers; middle-income countries; developing countries; China; crowd-out effect; aging (search for similar items in EconPapers)
JEL-codes: D64 H3 H55 J1 J14 J22 J26 O1 O12 O15 O16 R2 (search for similar items in EconPapers)
Date: 2019-04-20
New Economics Papers: this item is included in nep-age, nep-cna and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Working Paper: Do Private Household Transfers to the Elderly Respond to Public Pension Benefits? Evidence from Rural China (2020)
Journal Article: Do private household transfers to the elderly respond to public pension benefits? Evidence from rural China (2019)
Working Paper: Do Private Household Transfers to the Elderly Respond to Public Pension Benefits? Evidence from Rural China (2019)
Working Paper: Do Private Household Transfers to the Elderly Respond to Public Pension Benefits? Evidence from Rural China (2019)
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