Understanding the Economic Well-being of Elderly in China

Aging population is a universal phenomenon. However, as the most populous country in the world with the largest elderly population and ripple effect of the one child policy, China is expected to age even more rapidly than other emerging countries. As a labour economist and China economic development specialist, Prof Albert Park’s latest research is opening doors for researches on how to mitigate this potential crisis. 

Prof Park has been an investigator on the China Health and Retirement Longitudinal Study (CHARLS) for many years. With academics from Peking University and the University of Southern California, the team conducted a nationally representative sample for people age 45 and older by following them over the course of their lives. After a pilot study in 2008 in two provinces the first national survey was conducted in 2011. Since then, with the goal of producing a multi-purpose longitudinal dataset, this project has been undertaking surveys every two years. CHARLS survey is uniquely inter-disciplinary. The research team consists of experts on economics, public policy, physical and mental health, and cognition. The questionnaire of the survey includes modules on income and wealth, family, work and retirement, and health and healthcare utilization, and respondents also are evaluated for their physical health, mental health, and cognitive function. 

CHARLS sheds light on how issues related to the well-being of older people are interconnected. For example, government programs supporting the elderly could lead to families providing less support, reducing program impacts. Unlike most China datasets, the survey data of CHARLS is publicly available and has been widely cited by media like the Wall Street Journal and while also producing hundreds of research articles on a wide range of topics and issues. A recent spin-off project has been a special survey trying to understand the prevalence of dementia. Innovative measurements developed in the US for a similar dementia study were adapted for use in China, so that CHARLS can help researchers better understand the characteristics of people who get dementia and how their families are coping with the problem.

Prof. Park has also completed many early analyses related to the economic well-being of the elderly  in China. In the initial baseline report of CHARLS from 2013, his team produced an estimate of the elderly poverty rate which was higher than projected. Prof. Park has also researched wealth inequality and showed how health expenditures of the elderly increase with income levels. However, in rural China less money is spent on medical services as one ages, even in spite of declining health, an odd pattern that is inconsistent with what can be found in most developed countries. This could be because the elderly opt to self-sacrifice, not wanting the family to waste their savings. Another interpretation is that adult children are not willing to spend money on older parents.  Prof Park initiated another study which found that when China introduced a new pension program, the amount of money the elderly spent on their own healthcare increased. This suggests that low health expenditures by the elderly are not because they are reluctant to spend, but more likely due to family decisions that do not give their health high priority. More studies are showing that the pension program helps improve multiple dimensions of well-being of older people, making it increasingly clear that a pension system will be an indispensable part of tackling the challenge of an aging society.