John Giles (World Bank - DECRG) Dewen Wang (World Bank - Beijing & CASS-IPLE) Fang Cai (CASS - IPLE) The Current and Future Well-Being of China’s Rural.

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Presentation transcript:

John Giles (World Bank - DECRG) Dewen Wang (World Bank - Beijing & CASS-IPLE) Fang Cai (CASS - IPLE) The Current and Future Well-Being of China’s Rural Elderly

China’s Aging Rural Population China’s demographic transition and implications for its old age dependency ratio (OADR) are well-known Migration to urban areas is primarily an activity of the young As a result the OADR in rural areas is rising much faster than in rural areas. We predict trend in the OADR based on different assumptions for the total fertility rate and urbanization (migration) rate. Under reasonable assumptions of a low TFR and medium urbanization, the OADR in rural areas will rise from 13.5 percent in 2008 to 34.4 percent by 2030

Trend in Old Age Dependency Ratio in Rural and Urban China

International Comparisons of Old-Age Dependency Ratio Other countries had pension systems covering the rural population in place long before the population started to age: Denmark (1891), UK (1946), Japan (1971), South Korea (1990)

What are the Sources of Support for China’s Elderly? Compared to urban residents, the rural elderly: Have relatively low savings Lack pension support Rely on support from family members or own labor

Is Declining Co-Residence with Adult Children a Sign of Less Support?

Are Elderly with Migrants Less Likely to Receive Financial Support from Children? Net Transfers Received by Rural Elderly by Migrant Status of Adult Children

How has Employment Status of the Elderly Changed Over Time?

Is Migration of Children Associated with “Delayed Retirement”? Women over 70 appear more likely to work. Negative relationship between employment and determinants of wealth or permanent income (own education, and education of others) Negative relationship between receipt of pension income and work

Potential Policy Responses to Aging Rural Population Pension or Dibao? A Rural Pension? Current Participation in Rural Pension Programs is Low

Rural Population Participation Rates in Contributory Pension Schemes Participation Rate (%) of Working Age Rural Labor Force

Potential Policy Responses to Aging Rural Population Pension or Dibao? A Rural Pension? Current Participation in Rural Pension Programs is Low New Pension Initiatives: State Council Goal of Social Pension System by 2020 In Planning Stage, Rural Pilot in 10 Percent of Rural Counties Covering 10 Percent of Rural Population: Basic Account plus Individual Account With Migration and Urbanization, Do Separate Pension Systems Make Sense in the Long-term?