Living arrangements of the elderly: A new perspective from choice constraints in China

Abstract

As the foundation of elderly care, living arrangements are closely connected with the physical and psychological well-being of the elderly and the social resources allocation. The objective of this study is to understand the constraints between the preferred and actual choices of elderly living arrangements in China. We first establish a standardized theoretical model and derive two hypotheses on choice constraints. Based on the CHARLS database, we empirically test the theoretical hypotheses based on multiple-step empirical tests. Our findings are as follows. 1) The correlation between elderly income and the likelihood of living with their children is nonlinear: when the elderly prefers to live apart, their higher absolute income provides a greater likelihood that they can do so, and when they prefer to live with their children, the relative income of the elderly and their children are important in the likelihood of living together. 2) The poorer the health status of the elderly, the greater likelihood that they live with their children, particularly if they have daughters. The results are robust after controlling for the potential endogeneity issue, the passive choice situation, and volatility in preference.