PARITY AND SECURITY - A SIMULATION STUDY OF OLD-AGE SUPPORT IN RURAL CHINA

The rapid aging of the Chinese population, the consequence of drastic reductions in fertility and mortality in the past few decades, has raised serious doubt about the prospective adequacy of China's family support system for the elderly, especially in the rural areas, where very few elderly enjoy an old-age pension system. Will families alone be able to accommodate increasing burdens of supporting aged parents in the future, especially which the Chinese baby boomers enter retirement ages in the first half of the next century? In answering these questions, this study examines what individual households in rural China will face in meeting their responsibility toward parents. Results of a simulation exercise suggest that although the responsibility Of Supporting the elderly will increase substantially in the first half of twenty-first century, at any given time most rural households will experience only moderately increased burdens of old-age dependency. Thus, a variety of old-age security programs can be implemented to help those families that have the greatest old-age dependency burden, at relatively modest costs to the state.