New Plan and Traditional Practices: New Rural Pension Scheme and Elderly's Reliance on their Adult Children

Abstract

In most modern societies, elderly citizens rely more on their state pensions than their adult children and family members for economic support. Since 1997, urban elderly citizens in China have benefited from a sustainable retirement pension system and the vast majority have relied less on their adult children and family for help. This suggests a significant institutional and cultural shift from previous generations. At the same time, rural elderly in China have had limited or no pensions, forcing them to work well into their 60s and 70s. Moreover, unlike urban seniors, rural elderly citizens have depended on their adult children for support. However, in 2009 the central government enacted a New Rural Pension Scheme (NRPS) that provides a full rural pension plan with state and individual contributions. Early studies find that the NRPS has significantly reduced rural elderly financial dependence on their adult children, but it is still unclear whether or not the institutional changes have influenced elderly perceptions of dependence. That is, has the NRPS reduced rural elderly perceived reliance on their adult children? Using the 2013 China Health and Retirement Longitudinal Study (CHARLS) we find that rural elderly have become less financially dependent on their adult children, but the vast majority still believe they will depend on their adult children in the future.