The Influence Of Intergenerational Support On The Labor Supply Of The Elderly

As the number and proportion of China’s working-age population continue to decline,the total labour supply has also declined,yet the labour supply of older people who should be retiring is still relatively large.The reason for the high labor supply of the elderly is the transformation of intergenerational family relationships.In the context of rising housing prices and rising social care costs,young families face an increasingly heavy burden of marriage and childbearing,resulting in the direction of intergenerational support shifting from children to parents to parents to children.According to labor supply theory,economic income and time constraints are the most important factors influencing labor supply decisions,and intergenerational financial and caregiving support coincides with changes in economic income and time constraints,so intergenerational support has an important impact on the labor supply of the elderly.In this paper,the mechanism by which intergenerational support affects labor supply in old age is constructed from two paths: the income effect and the substitution effect.Intergenerational support can be divided into upward（offspring to parents）and downward（parents to offspring）aspects according to the direction,and can be divided into economic support and caregiving support according to the form.Intergenerational economic support affects the labor supply of the elderly by influencing their income level,i.e.the income effect;intergenerational care support affects the labor supply of the elderly by influencing their time allocation in household chores and leisure,i.e.the substitution effect.On this basis,this paper relies on data from the 2018 China Family Panel Studies（CFPS）tracking survey,this paper uses logistic regression to investigate the effect of intergenerational support in both upward and downward directions on the labor supply of the elderly,and uses propensity score matching and other methods to address the problem of self-selection of intergenerational support.On this basis,the mechanisms of the effect of intergenerational support on the labor supply of the elderly are identified.Finally,we propose measures to alleviate the labor burden of the elderly and enhance the well-being of the elderly in their old age.The main findings of this paper include.First,there is a high level of labour supply among the elderly.Forty-seven per cent of older persons are still working,with half of them being self-employed and half being employed.Among the sample of older persons who work,the average working week is34.86 hours,and 41 per cent of older persons work more hours than the legal requirement.First,the labour supply of the elderly is high.Nearly half of the elderly are still working,both in the self-employed and employed sectors,and in agriculture,where nearly half of the elderly are working.The average number of hours worked per week in the sample of older adults who participate in the workforce is 34.86 hours and 41% of older adults work longer than the legal requirement.Second,downward intergenerational support increases the labor supply of older adults.Downward economic support from parents to children increases the probability of labor participation among older adults by 50.6 percent,which remains statistically significant.Downward financial support significantly increases the probability that older adults will engage in self-employment and off-farm labor.Downward care support provided by parents to offspring increases the probability of labor participation by older adults by 7.4 percent,and although this effect is not significant overall,downward care support significantly increases the probability that older adults will engage in agricultural labor.Downward intergenerational economic support increases the average number of hours older people work per week by 1 hour and downward care support decreases the average number of hours older people work per week by 0.9 hours,but neither is significant.Third,upward intergenerational support reduces the labour supply of older persons.Upward economic support from children to parents reduces the probability of labour participation by 4.3 per cent,and although this reduction is not significant overall,upward economic support significantly reduces the probability of older people working for hire and off-farm.Upward caregiving support from offspring to parents reduces the probability of labor participation by 10.4 percent for older adults,remains statistically significant,and is more pronounced among groups of older adults with low levels of education,agricultural residence,females,and the West Central region.Upward intergenerational support both reduce the number of hours older adults work,with upward financial support significantly reducing the average number of hours older adults work per week by 1.9 hours and upward care support by 0.18 hours,but not significantly.Fourth,intergenerational support affects older people’s labor supply through income and substitution effects,respectively.Downward economic support affects older people’s labor supply by affecting their income level,while downward caregiving support does not have a significant effect on their labor supply by decreasing their leisure time and increasing their household chores.Upward financial support does not change the labour supply of older people as it does not have a significant effect on their income level and thus does not change their labour supply.Upward care support eases the burden of living and reduces the labour supply of older persons.Based on the above empirical findings,this paper puts forward policy recommendations to enhance the well-being of the elderly in terms of reducing the burden on the elderly and improving intergenerational relations.First,the retirement system should be improved to ease the burden of labour on the elderly.Secondly,the cost of marriage and childbearing for young families should be reduced,thereby alleviating the pressure on the elderly to provide financial support.Third,the social care service system should be improved to alleviate the task of intergenerational care for the elderly.Fourthly,harmonious intergenerational relations should be established to enhance the well-being of the elderly in their old age.