Labor market participation of the elderly: the role of family financial transfers in China

Population ageing has (usually negative) implications for economic growth linked to a declining population of working age. This study uses Chinese household data for 2018 to consider the determinants of the willingness of people who have reached the 'official' retirement age to remain part of the workforce. As well as controlling for a range of personal characteristics of the elderly, the emphasis here is on the economic importance of the relatively close relationship between parents and children in China. Our results show that the transfer of funds to parents' has the largest link with participation, because of the relative importance of such transfers. However, transfers from parents to children, while undertaken by only a small proportion of households, have a much larger association with whether the elderly work. Moreover, location is very important, with transfers to children having the largest effect in rural areas while transfers to parents have a stronger bearing in non-rural areas.