Intergenerational financial transfers and physical health of old people in rural China: evidence from CHARLS data

Guangyan Chen,Wei Si,Lingling Qiu

doi:10.1590/0103-8478cr20190725

Abstract

ABSTRACT: With the reduction of intergenerational temporal transfers, financial transfers from adult offspring to their elderly parents are prevailing in rural China. Although much has been done, little is known about the association between the expansion of intergenerational transfers and rural old people’s physical health in China. The purpose of this paper was to examine the effect of intergenerational financial transfers on the elders’ physical health in rural China. Using data collected from China Health and Retirement Longitudinal Study (CHARLS), panel data fixed effect model and threshold model are employed to estimate the impact of intergenerational financial transfers on the old people’s physical health in rural areas. Results showed that; although, the intergenerational financial transfers have a positive effect on the old people’s physical health, no linear relationship exists between them. Intergenerational financial transfers are clearly less effective for low-income old people’s physical health than those of middle-income, while the effect on high-income old people’s health is the most insignificant. Studies concerning the effect of intergenerational financial transfers on the elders’ health in developing countries remain limited. Findings of this paper provided great insights into how intergenerational transfers, such as intergenerational financial transfers, may affect the well-beings of old residents in rural areas. Additionally, this study can offer inspiration to policy makers regarding what measures they should take to enhance rural old residents’ well-beings.

Highlights

Rapid economic development and its accompanying social reforms in China have already aroused substantial scholarly interest in the wellbeings of the elders (LOGAN & BIAN, 2003; SUN, 2002)
This study showed that old people with higher level of income are healthier than those who are not, which is consistent with the findings of most researchers as higher income can contribute to more leisure opportunities, better nourishment and medical service (MARMOT, 2002; MARMOT & WILKINSON, 2001)
In contrast to the net impact caused by the upstream financial transfers, this paper found that various intergenerational financial supports from adult offspring have different effects on the elders’ physical health when old people’s income is taken into account

Summary

Introduction

Rapid economic development and its accompanying social reforms in China have already aroused substantial scholarly interest in the wellbeings of the elders (LOGAN & BIAN, 2003; SUN, 2002). Many researchers have extensively studied this topic, most of them focus solely on the urban area and its formal pension system. Little attention has been paid to living conditions of the elders and the informal family mutual insurance system in rural areas, where nearly one half of the Chinese residents, and a largest amount of the elders live. Contrast to old residents in urban areas, most old residents in rural areas have to depend exclusively on their family members, especially their adult offspring, to provide informal assistance for their lives (WANG & LI, 2011).

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