Old Age Support in Urban China: The Role of Pension Schemes, Self-Support Ability and Intergenerational Assistance.


School of Management and Economics, University of Electronic Science and Technology of China, No. 2006 Xiyuan Ave, West Hi-Tech Zone, Chengdu 611731, China. [Email]


With the aim of probing into the life satisfaction of retired urban elderly in China with respect to old age support systems, this study examines the effect of pension reform with its existing inequalities across demographic and social groups on the life satisfaction of retired urban residents. The complementary role of intergenerational assistance and self-support on the life satisfaction of beneficiaries and non-beneficiaries of the pension scheme was analyzed using an ordered logit regression model with 2015 national representative data from China's Health and Retirement Longitudinal Survey. Our sample consists of a cross-sectional data set of 3815 retired urban elderly aged 60 and above. The empirical results depict that though enjoying benefits from the public pension scheme generally enhances life satisfaction, beneficiaries of the Government and Institution Pension and Enterprise Employee Basic Pension are more advantaged than beneficiaries under the Urban-Rural Social Pension Scheme. The pension inequalities existing at provincial levels and across social groups such as gender and residence registration status also affect life satisfaction adversely. Women and rural 'Hukou' registered retired urban residents are at an apparent disadvantage. Getting financial and emotional support from children broadly improves life satisfaction. Non-beneficiaries of the public pension benefit more from the financial support of children than public pension beneficiaries. There is also a positive effect of cohabiting with children on life satisfaction when retired urban residents are single as compared to being married. Financial and physical self-support ability in forms of good health, home ownership and wealth management enhance life satisfaction significantly. However, largely, retired urban elderly have a higher life satisfaction when they are financially independent of children and are supported by state pension schemes. Our findings indicate that self-support ability of the elderly together with pension benefits are more effective in enhancing the life satisfaction of retired urban elderly in China. It is recommended that government institute policies to promote personal finance initiatives by the elderly while improving the pension scheme and reducing pension inequality.


China’s urban elderly,Enterprise Employee Basic Pension,Government and Institution Pension,Urban-Rural Social Pension Scheme,intergenerational interaction,life satisfaction,pension reform,personal finance,public pension scheme,