Do the elderly consume more energy? Evidence from the retirement policy in urban China

Abstract

Investigating the energy consumption behavior of the elderly is of great significance in improving welfare and energy conservation in the context of aging. This paper uses the regression discontinuity design to investigate the effect of retirement on the electricity consumption of the elderly using data from China family panel studies (CFPS) over the period 2010–2018. The results reveal that retirement increases household electricity consumption by 20.03%–32.13%, and this effect is more significant among residents with high income, high education and good health. The increase in home time caused by intergenerational care after retirement serves as an important channel of influence. Further analysis shows that residents’ electricity expenditure increases by 36.44% on average, and the higher the residential electricity consumption, the higher the electricity expenditure. We also observe that national annual retirement increases electricity consumption by 1.71 billion kWh, which accounts for 0.17% of the total electricity consumption of residents. These findings reveal the urgency needed to address future energy demand shocks and reform the increasing block pricing system for the elderly to avoid a decline in their welfare.