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Money and mental health: The impact of intergenerational transfers on elderly people in China

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  • Simon Appleton
  • Jinying Huang
  • Xuyan Lou
  • Minghai Zhou

Abstract

Using three waves of the China Health and Retirement Longitudinal Study, this paper examines whether financial transfers from adult children to elderly parents affect the latter's mental health. Both OLS and instrumental variable (IV) estimates show that financial transfers significantly attenuate depressive symptoms of elderly individuals, with a much larger size of the IV estimates. We also examine the income and cultural channels through which intergenerational transfers work and further discuss the explanatory powers of these two channels through a decomposition analysis. The results suggest the cultural channel accounts for a larger proportion of the financial transfer effect. This means that the unique beneficial impact of intergenerational financial transfers on the mental health of older adults cannot be fully substituted in the foreseeable future.

Suggested Citation

  • Simon Appleton & Jinying Huang & Xuyan Lou & Minghai Zhou, 2024. "Money and mental health: The impact of intergenerational transfers on elderly people in China," Health Economics, John Wiley & Sons, Ltd., vol. 33(11), pages 2645-2670, November.
    • Handle: RePEc:wly:hlthec:v:33:y:2024:i:11:p:2645-2670
    DOI: 10.1002/hec.4887
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    1. Wenguang Yu & Yixin Gao & Rui Wang & Xiaohan Feng & Rong Sun & Yujuan Huang, 2024. "OLG Model Analysis of Delayed Retirement and Social Pension Effects on Family-Based Elderly Care in China," Mathematics, MDPI, vol. 12(21), pages 1-18, October.

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