Public Pensions and Income Transfer Between the Elderly and Their Children

Abstract

Using data from the China Health and Retirement Longitudinal Survey of 2013 and 2015, this study investigates the effect of enrollment in public pensions and the amount of public pension benefits on the income transfer between the elderly and their children. The three conclusions are as follows. First, in general, there is a flattening and then rising trend in the relationship between enrollments in pensions and net transfer income; the effect of the amount of pension benefits on net transfer income is negative but not significant. Second, the amount of pension benefit of the New Rural Social Pension Insurance does not significantly affect the net transfer income, transfer income from children, or transfer income to children, while the pension benefit of the Employees’ Basic Pension Insurance has a significant positive effect on the transfer income to children. Third, the effects of pensions differ by the heterogeneous group. The need for high pension income is greater for the disadvantaged group, such as older women, single elderly, co-residence elderly, elderly with chronic diseases or disabilities, and elderly in the rural central and eastern regions.