John Giles (World Bank - DECRG)

1
The Current and Future Well-Being of Chinas
Rural Elderly

• John Giles (World Bank - DECRG)
• Dewen Wang (World Bank - Beijing CASS-IPLE)
• Fang Cai (CASS - IPLE)

2
Chinas Aging Rural Population

• Chinas 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

3
Trend in Old Age Dependency Ratio in Rural and
Urban China
4
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)

5
What are the Sources of Support for Chinas
Elderly?

• Compared to urban residents, the rural elderly
• Have relatively low savings
• Lack pension support
• Rely on support from family members or own labor

6
Is Declining Co-Residence with Adult Children a
Sign of Less Support?
7
Are Elderly with Migrants Less Likely to Receive
Financial Support from Children?Net Transfers
Received by Rural Elderly by Migrant Status of
Adult Children
8
How has Employment Status of the Elderly Changed
Over Time?
9
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

10
Potential Policy Responses to Aging Rural
Population

• Pension or Dibao?
• A Rural Pension?
• Current Participation in Rural Pension Programs
  is Low

11
Rural Population Participation Rates in
Contributory Pension Schemes
Participation Rate () of Working Age Rural Labor
Force
12
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?