Rural Pensions, Intra-Household Bargaining, and Elderly Medical Expenditure in the People’s Republic of China

ASIAN DEVELOPMENT BANKASIAN DEVELOPMENT BANK6 ADB Avenue, Mandaluyong City1550 Metro Manila, Philippineswww.adb.orgRURAL PENSIONS, INTRA-HOUSEHOLD BARGAINING, AND ELDERLY MEDICAL EXPENDITURE IN THE PEOPLE’S REPUBLIC OF CHINAZeyuan Chen and Albert ParkADB ECONOMICSWORKING PAPER SERIESNO. 693September 2023Rural Pensions, Intra-Household Bargaining, and Elderly Medical Expenditure in the People’s Republic of ChinaThis study investigates the impact of a new social pension program in the People’s Republic of China on the health expenditures of rural elderly people. Results show that receiving pension payments increases outpatient care utilization and expenditures among ill elderly people. Pensions improve bargaining power for elderly people who live with their children or grandchildren. This enables elderly people to spend more on health care. However, pensions have no significant effect on medical expenditures of elderly people who live independently. About the Asian Development BankADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members —49 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. ASIAN DEVELOPMENT BANKThe ADB Economics Working Paper Series presents research in progress to elicit comments and encourage debate on development issues in Asia and the Pacific. The views expressed are those of the authors and do not necessarily reflect the views and policies of ADB or its Board of Governors or the governments they represent.ADB Economics Working Paper SeriesRural Pensions, Intra-Household Bargaining, and Elderly Medical Expenditure in the People’s Republic of ChinaZeyuan Chen and Albert ParkNo. 693 | September 2023Zeyuan Chen (zychen@swufe.edu.cn) is an assistant professor at the School of Public Administration, Southwestern University of Finance and Economics, Chengdu, People’s Republic of China. Albert Park (afpark@adb.org) is the Chief Economist and Director General of the Economic Research and Development Impact Department, Asian Development Bank. Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO)© 2023 Asian Development Bank6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, PhilippinesTel +63 2 8632 4444; Fax +63 2 8636 2444www.adb.orgSome rights reserved. Published in 2023.ISSN 2313-6537 (print), 2313-6545 (electronic)Publication Stock No. WPS230373-2DOI: http://dx.doi.org/10.22617/WPS230373-2The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB in preference to others of a similar nature that are not mentioned.By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this publication, ADB does not intend to make any judgments as to the legal or other status of any territory or area.This publication is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) https://creativecommons.org/licenses/by/3.0/igo/. By using the content of this publication, you agree to be bound by the terms of this license. For attribution, translations, adaptations, and permissions, please read the provisions and terms of use at https://www.adb.org/terms-use#openaccess.This CC license does not apply to non-ADB copyright materials in this publication. If the material is attributed to another source, please contact the copyright owner or publisher of that source for permission to reproduce it. ADB cannot be held liable for any claims that arise as a result of your use of the material.Please contact pubsmarketing@adb.org if you have questions or comments with respect to content, or if you wish to obtain copyright permission for your intended use that does not fall within these terms, or for permission to use the ADB logo.Corrigenda to ADB publications may be found at http://www.adb.org/publications/corrigenda.Notes: In this publication, “$“ refers to United States dollars and “CNY” refers to yuan. ADB recognizes “China” as the People’s Republic of China. ABSTRACT The rural elderly in the People’s Republic of China spend less on medical expenditures as they age despite declining health, which raises welfare concerns. This paper investigates the role of intra-household bargaining power on health expenditures of the elderly by evaluating the impact of cash transfers from a new social pension program. The