Are the Chinese Saving for Old Age?
The Relationship between Future Pension Benefits
of 45–60 Years Old Chinese and Current Household
C.E. van Dullemen
J.M.G de Bruijn
Received: 27 July 2015 / Accepted: 5 September 2016 / Published online: 7 October 2016
The Author(s) 2016. This article is published with open access at Springerlink.com
Abstract Worldwide, older people’s support used to be the adult children’sresponsi-
bility. In China, two generations after introducing the one-child policy in the late 70-ies,
this becomes an increasingly demanding obligation. The Chinese government took the
responsibility to mitigating old- age poverty risks and realized unprecedented progress
in pension coverage. At the same time, the household savings increased to about 30 %
of disposable income. Built on previous research on the politics of ageing, this study
analyses households responses to the established governmental and firm pension
programs as well as to the New Rural Pension Scheme (NRPS), introduced in 2009.
The central question is: will participation in the established and new pension programs
lead to higher current Chinese household expenditures and therefore to lower savings?
The China Health and Retirement Longitudinal Study (CHARLS) dataset of 2011
offered the opportunity to study the influence of the recently introduced NRPS. We
find that Chinese households with members between 45 and 60 years who expect future
Population Ageing (2017) 10:287–310
Highlights • In China, rural households where one of more members are covered via the New Rural Pension
Scheme currently do not expend more than households with members who are not covered by NRPS.
• Households where one or more members are covered via a government or firm pension, spend 28 % more on
basic goods and 80 % more on luxury goods than households where members are not covered by one of these
established pensions. However, this is not a causal relationship.
• In China, coverage by pensions, be it in urban or rural programs, does not determine higher household
expenditures and therefore lower savings.
* C.E. van Dullemen
J.M.G de Bruijn
Free University, Amsterdam, Netherlands