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The Motives of Intergenerational Transfers in China

Author

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  • Kwok Ho Chan
  • Wangnong Liao

Abstract

International transfers in China are mostly from adult children to elderly parents. Using data from the China Health and Retirement Longitudinal Study (CHARLS), this study explores the motives of intergenerational transfers in China. Understanding the motives of intergenerational transfers is crucial for policy makers. Altruistic motive and exchange motive would lead to different response from the transferors. Theories show that transfers based on altruistic motives would be crowded out by public transfers. The conditional least-square threshold model is used to allow the possible coexistence of altruistic motive and exchange motive. Results show adequate evidence to support the altruistic motive. Other motives include the social norm motive, the self-interest motive and the demonstration effect motive are explored, but the results are not sufficient to support them. Appropriate public old-age policy needs to address this crowding-out issue, to help elderly people, especially in rural areas.

Suggested Citation

  • Kwok Ho Chan & Wangnong Liao, 2022. "The Motives of Intergenerational Transfers in China," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 12(8), pages 308-317.
    • Handle: RePEc:asi:ijoass:v:12:y:2022:i:8:p:308-317:id:4562
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