Abstract
The pace of aging in China is accelerating, from the introduction of family planning to the liberalization of the two-child policy, with a growing proportion of families in the 4–2-1 structure. With filial piety in mind, most adult children will live with their elderly parents and share income and expenditure. Concurrently, due to the inadequacy of the social security system, a heavy supplementary burden of supporting the elderly has been placed on adult children. Based on data from the 2011, 2013, 2015, and 2017 Chinese Social Survey (CSS) of the Chinese Academy of Social Sciences (CASS), this study analyzes the objective factors affecting household elderly support expenditure using the ordinary least squares (OLS) estimation method. It also examines the crowding-out effect of elderly support expenditure on the consumption of different types of households through a panel generalized method of moments (GMM) approach. Finally, the crowding-out effect of elderly support expenditure is discussed in a sub-sample according to the number of households needing to support the elderly aged 60 and above. The empirical results illustrate that there is a crowding-out effect of elderly support expenditure on household consumption, and the magnitude of the crowding-out effect varies for diverse consumption. Our study reveals that the crowding-out effect of elderly support expenditure on core consumption is the largest in a sample with different numbers of elderly persons in families. The empirical results for the sub-sample show that the larger the elderly population, the stronger the crowding-out effect of elderly support expenditure on core consumption and the less pronounced the effect on marginal consumption.
Highlights
According to World Bank data, the world’s aging population grows by 3% every year with the age of over 60 as the dividing line
Our study has found that elderly support expenditure will squeeze the family consumption of adult children, and the crowding-out effect is different in samples with different numbers of elderly people
The relationship between elderly support expenditure and the consumption of different types of households was examined from a micro level
Summary
According to World Bank data, the world’s aging population grows by 3% every year with the age of over 60 as the dividing line. By 2016, the global aging rate had been. In 2017, the elderly population reached 962 million, accounting for 13% of the total population (United Nations 2017)—these data far exceed international standards. Huo et al Frontiers of Business Research in China. In the 1950s, the phenomenon of population aging first appeared in developed countries in Europe and the United States. By the end of the 1970s, most developed countries had aging populations. At the beginning of the 21st century, China began to experience population aging
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