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China’s Social Safety Net: Who Will Care For Grandma?

Jul 5, 2013 • Behavioral Economics, Developing Economies, Economic Growth, Economic History, Labor, Macroeconomic Measurement, Regulation • 461 Views    No Comments

Last year, a 77 year old Chinese woman sued her daughter and son-in-law for neglect. She won. Ruling that the children had to visit their mom at least once every 2 months and provide financial support, the court supported China’s “filial piety” tradition.

Children used to read the parables in Guo Jujing’s “The 24 Paragons of Filial Piety.” Written 6 centuries ago, stories tell of the man who sold himself into servitude to pay for a father’s funeral. They describe the son who stayed awake all night to protect his parents from mosquitoes.

Now though, Guo Jujing is irrelevant. As young adults move from rural villages to jobs in the city they leave their parents behind. One successful fruit vendor admitted, “One time I didn’t get to go home for four years. Business is good here but I feel guilty for not being with my parents.”

You can see what is happening. If the children are not caring for their parents and no social safety net exists, then what is the solution?

In a recently issued law called the “Protection of the Rights and Interests of Elderly People,” Chinese legislators have proclaimed that young adults have a filial obligation and businesses should provide vacations for parental visits. Another government group updated Guo Jujing’s parables with content that included buying health insurance, going home for walks, and teaching the internet to one’s parents. Correspondingly, an official newspaper printed an article about a young man who transported his disabled mother to a popular resort by pushing her wheelchair for 93 days. The newspaper said it was “by far the best example of filial piety.”

Yes, according to the NY Times, the government has received ridicule for its approach. But still, the dilemma has to involve the government. As China’s economy develops, questions about a social safety net multiply. You can see the demographics that the Chinese will have to cope with in the following table from The Economist.

Human Capital China's Aging Population from the Economist

Our bottom line: In a world with limited land, labor and capital, any decision to allocate resources to the elderly means less will be available to everyone else. As one commentator asked, “Will China grow old before it grows rich?”

Sources and resources: Telling more about the dilemmas created by an emerging market, in one article, the NY Times considered China’s aging population and in another (the source of my quotes), filial piety. Here, The Economist included the above table in its discussion of China’s aging population.

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