By: Francisca Gomez
The challenges of providing for the growing population of seniors and the need for greater domestic consumption are widely acknowledged in the literature about China. This post will show how these two seemingly independent issues can be linked in a simple way: by boosting the consumption power of current and future senior citizens. As long as China is making efforts to increase domestic consumption as a percentage of GDP, focusing on the elderly, who are growing as a segment of China’s population, is a reasonable approach. This solution combines two sources of great concern to China’s government and citizens.
The effects of the one-child policy on the family structure in China are well known. Combined with rising life expectancies, today’s families are known as “4-2-1”: 4 grandparents, 2 parents, 1 child. Although traditionally children are responsible for caring for their elderly parents (indeed, obligated morally and by law), today’s China is drastically different from the society that made the concept of ‘filial piety’ so strong, and resilient. The reduced family size is of enormous importance, as there are usually no siblings with whom to share the responsibilities of caring for the elderly. The demands of the modern economy mean that children need to spend more time working and developing their careers; staying at home to care for one’s elderly parent is not a feasible option for many. In rural areas, many elders have been left behind by their children who have migrated to other parts of China seeking better opportunities. While migrant children’s remittances can greatly contribute to their parents’ standards of living, oftentimes the remittances are not sufficient to cover the costs of old age, especially illness. The distance, however, makes it difficult for children to play a more active role in helping out their parents in old age.
Today there is increasing pressure on adults to care for both elderly parents and children (most commonly, child). This situation is referred to as the “mid-life squeeze.” It is, therefore, increasingly important for the government to provide welfare benefits to the elderly. Although pension reform has been at the forefront of Chinese policy in the past few years, many shortcomings remain. Coverage is not universal, mobility of pension funds from one province to another is limited, and there is a significant gap between the rural and urban elderly (which the reform is attempting to address, with discouraging results). Payments are not always sufficient, especially when the costs of illness must be covered. Private savings are also generally insufficient for seniors to maintain their standards of living in old age, without additional sources of revenue. Much progress has yet to be made.
At the beginning of this post, a link was made between caring for the elderly and boosting domestic consumption. One source of growing concern is the shortage of nursing homes for the elderly. Wait-lists are long in public homes, which are usually funded by the local governments and communities or subsidized by the Chinese government. Yet everything—beds, facilities, professionals to staff the homes—is scarce. Except for one thing: the elderly who are in need of care. Prior to the 1990s, the nursing homes were reserved for the “Three No’s”: elderly adults who had no children, no income, and no relatives. Few elderly wanted to end up in a nursing home because tradition dictates that the family is responsible for caring for their elderly relatives. However, modern life has gradually eroded the prejudice, with the result that the lack of facilities has become apparent and problematic.
The problem is clear, and so is a solution. A growing number of senior citizens are in need of care, but their children have less time to provide it. There are not enough trained professionals who can staff the nursing homes. There are not enough homes to satisfy the needs of the elderly. Incomes are small and insufficient. Domestic demand needs to grow. It is important, however, that the provision of care for the elderly is not allowed to grow with little oversight. This is an issue that concerns all of China’s society, and regulation and supervision is necessary to ensure that the prejudices against nursing homes continue to fade.
Francisca Gomez is a Second Year in the College majoring in Political Science and Economics.