The crowding-out effect of elderly support expenditure on household consumption from the perspective of population aging:evidence from China

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.

Does Population Aging Hinder the Accumulation of Human Capital?Evidence from China

There is no consensus on the impact of population aging on education investment.To explore this question,we first build an overlapping generations(OLG)model to theoretically analyze the effect of population aging on human capital investment in China,and then test our theory by conducting an empirical study based on micro household data.We find the following.(1)Theoretically,the OLG model shows that population aging has a crowding-out effect on education investment.(2)Empirically,the results show that the share of education and training expenditures decreases by 5.27 percentage points as the ratio of old people in the household increases by 100 percentage points,which confirms the crowding-out effect of population aging on human capital investment.(3)The crowding-out effect is far more intense on urban households than on rural households since health care expenditures will be greater in urban areas as population aging increases.(4)A quantile regression indicates that the negative effect of population aging on the share of educational expenditure is concentrated in households with higher shares of education expenditures.We confirm the robustness of our results using regional fixed effect and instrumental variable(Ⅳ)regressions.