Intergenerational transfers and household saving in China : new survey evidence on the extent and motivation of intergenerational transfers in urban and rural China

摘要

This thesis offers new insights explaining the lack of dissaving among elderly in China. Weprovide new survey data from China with detailed information on the economic situation ofelderly, and in particular on the interaction between elderly parents and adult children. Wepresent data on the extent of inter-vivos transfers and intended bequests, and we test whetherthese transfers represent strategic interaction with adult children, reflecting life-cycle andprecautionary motives for wealth accumulation, or altruistic motives.We find that elderly Chinese on average intend to pass along more than six times their yearlynet income in bequests and large inter-vivos transfers to their children. We also reveal thatthese transfers serve as strong motives in the saving behaviour of the old generation inChina. Furthermore, we find that the extensive amount of transfers fits better to an exchangemodel of intergenerational transfers than to an altruistic model. Recipient’s earnings affectdownward transfer amounts positively, and both the probability of receiving bequests anddownward transfer amounts correlates positively with strategic child interaction. We find apositive relationship for elderly-care provision by adult children, and, for a subset of thepopulation, evidence of intra-family annuity markets where children provide elderly parentswith regular financial support in exchange for increased bequests. We find only weakindications of intergenerational transfers motivated by altruism, and this effect isconcentrated among those with the highest income levels.The findings have powerful implications both theoretically and for policy making. First, theycontribute with supportive evidence to the debate over the capability of life-cycle motives toexplain wealth accumulation among elderly in China. The findings also suggest that largeamounts of bequests and intergenerational transfer not necessarily are contradictory to suchsaving motives. Indeed, the findings indicate that downward intergenerational transfers havean important role in securing elderly-life care and income security for elderly in China. Thishas implications for new governmental social security and health care programs that need tocarefully take into account the effect such programs will have on intergenerational transfers.