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«D I R E C T I O N S I N D E V E LO P M E N T Human Development Public Disclosure Authorized The Elderly and Old Age Support in Rural China Challenges ...»

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69.0 percent in 2008 to 63.5 percent in 2030, while the urban workingage share will decrease from 77.2 percent to 70.0 percent during the same period (figure 1.9). In the process of urbanization, migration of young people into cities will shift the distribution of the working-age population further from rural to urban areas. Among the total workingage population, rural people accounted for 51.6 percent in 2008, but that percentage will drop to 37.7 percent in 2030 under reasonable rural-tourban migration assumptions.

Even with higher TFRs in rural areas, migration implies that population aging will occur more rapidly in rural areas. In 2008, 9.35 percent of the population was 65 years of age and older in rural areas and 6.94 percent in urban areas, a gap of 2.41 percentage points. By 2030, the aged proportions in rural and urban areas will be 21.84 percent and

14.75 percent, respectively, increasing the gap to 7.09 percentage points (figure 1.10). As more young people move to and choose to stay in Figure 1.9 Trends of Working-Age Population in China, 2008–30 proportions of working-age

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Figure 1.10 Trends of Population Aging in Rural and Urban China, 2008–30 aged proportion (%) Source: Cai, Giles, and Wang 2009.

cities, finding favorable conditions in rural areas to support the rural elderly poses a major challenge to China’s rural and socioeconomic transformation.

The acceleration of population aging will raise the support burden of the working-age population, though this effect will be masked somewhat in the medium term by a decline in the child dependency ratio in rural areas. The total dependency ratios in rural areas appear stable between 2008 and 2025 (figure 1.11) because the rural child dependency ratio will fall significantly while the pace of population aging increases. The child dependency ratios will converge between rural and urban areas in 2025 and then remain stable. The child dependency ratio in urban areas will keep increasing, but at a slower pace.

Old-age dependency ratios will diverge between rural and urban areas (figure 1.12). In 2008, rural and urban ratios were 13.5 percent and 9.0 percent, respectively, and the gap was 4.5 percentage points.

The gap in old-age dependency ratios will widen to 13.3 percentage points by 2030, when the old-age dependency ratio will reach 34.4 percent in rural areas and 21.1 percent in urban areas.

Although different assumed scenarios for urbanization and fertility yield somewhat differing results, the fundamental demographic trends remain similar. Figure 1.13 reports the elderly shares of the rural population under four combinations of TFRs and 2030 urbanization levels to test the robustness of the conclusions under the “base case” scenario used 24 The Elderly and Old Age Support in Rural China

–  –  –

Source: Cai, Giles, and Wang 2009.

Figure 1.12 Old-Age Dependency Ratios in Rural and Urban China, 2008–30 old-age dependency ratio (%) Figure 1.

13 Scenarios of Aged Proportions in Rural China, 2008–30 aged proportions of rural population (%) Source: Cai, Giles, and Wang 2009.

Note: HFHU = high TFR, high urbanization level; HFLU = high TFR, low urbanization level; LFHU = low TFR, high urbanization level; LFLU = low TFR, low urbanization level.

• Low TFR and high urbanization level

• Low TFR and low urbanization level The trends from the preceding four combinations are similar, but the elderly proportions of rural population differ significantly under each scenario by 2030.

As shown in figure 1.13, the largest aged proportion occurs under a scenario of low TFR and high urbanization level by 2030. As discussed before, migration will attract more young people into cities. In the meantime, the low TFR will accelerate the speed of population aging.

Therefore, these two forces will influence population aging in rural areas. In contrast, the smallest aged proportion would occur in the scenario with high TFR and low urbanization. With more young people staying in rural areas, the aged proportion would be lower. In 2030, the difference in the aged proportion between these two scenarios is 3.9 percentage points. Urbanization will likely accelerate in the coming years. The scenario of low TFR and high urbanization is therefore perfectly possible and would result in the most acute dependency ratio in rural areas (figure 1.14).

26 The Elderly and Old Age Support in Rural China Figure 1.14 Scenarios of Old-Age Dependency Ratios in Rural China, 2008–30 rural old-age dependency ratios (%) Source: Cai, Giles, and Wang 2009.

Note: HFHU = high TFR, high urbanization level; HFLU = high TFR, low urbanization level; LFHU = low TFR, high urbanization level; LFLU = low TFR, low urbanization level.

Conclusion As the demographic transition outlined in this chapter takes place, families will suffer further strain to support future generations of the rural elderly when young adults move into cities and family size becomes smaller, with fewer potential care providers. The population projections in this chapter use different fertility and migration scenarios to illustrate the acceleration of the demographic transition; they show that aging will remain far more pronounced in rural than urban areas. Although fertility is higher in rural areas than in urban areas, the large-scale migration of the young population will hollow out villages and leave behind older people, women, and children. At the national level, the old-age dependency ratio will pass 20 percent and continue to rise even faster to 30 percent around





2028. The levels of old-age dependency will be significantly higher in rural areas, and the gap in dependency rates between rural and urban areas will widen.

The trends of population aging in rural areas raise many questions about the potential for future elderly to support themselves and the possibility that they may fall into poverty. To address these questions, Trends in the Aging of China’s Rural Population: Past, Present, and Future 27 the current determinants of poverty and sources of formal and informal support among the elderly are examined, including the following: How much poverty and vulnerability are observed presently among the rural elderly, and is this situation changing over time? What kinds of formal and informal social protection methods are available for rural households to cope with (and forestall) poverty among the rural elderly?

What effects has the mass migration of recent years had on the efficacy of informal social protection mechanisms? In light of the evidence, does public policy have a role to support the rural aged population? The following chapters address these questions.

Note

1. See World Bank (forthcoming) for discussion of other strains on traditional support networks and chapters 3 and 4 of this report for sources of support and savings for the rural elderly.

References Cai, Fang, John Giles, and DewenWang. 2009. “The Well-Being of China’s Rural Elderly.” Background Paper for East Asia Social Protection Team, World Bank, Washington, DC.

Gu, Baochang, Wang Feng, Guo Zhigang, and Zhang Erli. 2007. “China’s Local and National Fertility Policies at the End of the Twentieth Century.” Population and Development Review 33 (1): 129–47.

Guo, Zhigang. 2004. “A Study and Discussion on China’s Fertility in the 1990s.” [In Chinese.] Population Research 28 (2): 10–19.

———. 2008. “China’s Low Fertility and Its Determinants,” Population Research 32 (4): 1–12.

Johnson, D. Gale. 1994. “Effects of Institutions and Policies on Rural Population Growth with Application to China.” Population and Development Review 20 (3): 503–31.

NBS (National Bureau of Statistics). 1991–2006. China Population Statistics Yearbook. Beijing: China Statistics Press.

———. 2001. 2000 Fifth Population Census Data. Beijing: China Statistics Press.

———. 2007a. China Population and Employment Statistics Yearbook. Beijing:

China Statistics Press.

———. 2007b. “2005 One Percent Population Sample Dataset” (unpublished).

———. 2008. China Population and Employment Statistics Yearbook. Beijing:

China Statistics Press.

28 The Elderly and Old Age Support in Rural China ———. 2009. China Population and Employment Statistics Yearbook. Beijing:

China Statistics Press.

Retherford, D. Robert, Minja Kim Choe, Jiajian Chen, Xiru Li, and Hongyan Cui, 2005. “How Far Has Fertility in China Really Declined?” Population and Development Review 31 (1): 57–84.

Schultz, T. Paul, and Zeng Yi. 1999.

“The Impact of Institutional Reform from 1979 through 1987 on Fertility in Rural China.” China Economic Review 10:

141–60.

Uhlenberg, Peter. 2009. International Handbook of Population Aging. New York:

Springer.

UN DESA (United Nations, Department of Economic and Social Affairs, Population Division). 2009. “World Population Prospects: The 2008 Revision, Highlights.” ESA/P/WP.210. New York: United Nations. http://www.un.org/ esa/population/publications/wpp2008/wpp2008_text_tables.pdf.

Vermeer, Eduard B. 2006. “Demographic Dimensions of China’s Development.” Population and Development Review 32: 115–44.

World Bank. Forthcoming. Social Assistance in Rural China: Tackling Poverty through Rural Dibao. Washington, DC: World Bank.

Yao, Xinwu, and Hua Yin. 1994. China Normally Used Population Dataset. Beijing:

China Population Press.

CHAPTER 2 Poverty and Vulnerability among China’s Rural Elderly This chapter looks at poverty and vulnerability among the rural elderly in

China during the past decade. Key findings include the following:

• The rural elderly are on average poorer than the general population and substantially poorer than the urban elderly.

• They are also more likely to remain poor and are more vulnerable than the younger population.

• Location matters more as a determinant of poverty for the rural elderly than for working-age adults, though its importance has declined over time.

• In terms of factors that affect incomes of the rural elderly, those who have more education or a pension are likely to have higher incomes. The effect of having a migrant child is, however, more complex. Although having a migrant child has an inconclusive effect on the income of elderly rural households, having migrant children has a clearer and positive effect in terms of ability to cope with shocks to household income, whether communitywide or household specific.

30 The Elderly and Old Age Support in Rural China

Poverty among the Rural Elderly As a group, the rural elderly remain notably poorer than younger rural households, even though their poverty rates have fallen over recent decades. Figure 2.1 highlights this situation by showing the evolution of the rural poverty head-count ratio by age of household head from 1991 to

2004.1 Income poverty has fallen for all age groups in rural China, but notably, households headed by older individuals have a higher incidence of poverty than households with working-age heads for each year. By 2004, the income poverty rate for rural households with working-age heads was only 8.5 percent, whereas it was 15.0 percent for households with a head age 71 to 80 years and 17.0 percent for households with a head over 80 years of age. This pattern occurs because younger working-age adults with higher education are more likely to take advantage of opportunities from economic growth.

The rural elderly have also remained consistently poorer than the urban elderly over time. Using the China Urban and Rural Elderly Survey (CURES) conducted in 2006, table 2.1 provides a comparison of poverty among the elderly in urban and rural areas. Poverty among the elderly is a much greater problem in rural than in urban areas. The CURES (2006),2 which is a nationally representative sample, suggests that 19 percent of rural elderly have consumption levels below the official poverty line, whereas only 6 percent of the urban elderly are below the higher “basic needs line.” The comparable share of elderly with consumption below the basic needs line in rural areas is 29 percent. The poverty gap measure, which measures the depth of households below the poverty line, also suggests a more severe problem in rural areas than in urban areas. Finally, the poverty severity measure picks up the effects of inequality among the poor and suggests that severe poverty is also a more serious problem in rural than urban areas.3 Given the access of the urban elderly to pension income as well as family support, it is not surprising that poverty is much higher among the rural elderly.

Chronic Poverty among the Rural Elderly Chronic, or persistent, poverty is also a problem faced more by older rural households. The chronically poor can be defined as those households that are poor on three successive survey rounds. Households headed by elderly individuals in their seventies remain the most exposed to chronic poverty.

Although incidence of chronic income poverty fell in the China Health Figure 2.1 Percentage of Poor Rural Households, by Age of Household Head

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and Nutrition Survey (CHNS) to nearly zero for cohorts under 70 years of age, nearly 22 percent of elderly in their seventies as of 2000 experienced persistent poverty over three survey rounds spanning a seven-year period (figure 2.2).

Why do rural elderly in their seventies face a greater incidence of persistent income poverty? Younger elderly in their sixties continue to earn considerable income from work in agriculture, but the ability to continue agricultural work degrades with age, and the elderly lack significant sources of income other than support from adult children. Those elderly surviving into their eighties are a select group. In rural areas, they typically reside with adult children, who have higher incomes.



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