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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front. Econ. China    2018, Vol. 13 Issue (2) : 249-280
Orginal Article |
Agricultural Roots in Intergenerational Transfers in China
Yan Liu1, Qingqing Zong2()
1. Guanghua School of Management, Peking University, Beijing 100871, China
2. School of Public Economics and Administration, Shanghai University of Finance and Economics, Shanghai 200433, China
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Economists have been interested in the motivations of intergenerational transfers, for different motivations affect the effectiveness of anti-poverty public transfers. However, one’s motivation is largely shaped by culture and social conventions. This paper sheds light on the influence of rice cultivation in intergenerational transfers in China. This is also the first time that economists consider cultural factors in the study of intergenerational transfers. Cultivating rice requires elaborate irrigation systems and large amounts of labor input so that rice farmers have to cooperate extensively with their neighbors, which has gradually shaped people’s value to be more inter-dependent. Based on micro-level data from CHARLS and sub-national rice data from China, our empirical results show strong evidence that individuals from rice regions are more likely to provide economic support for their parents. A one-percentage point increase in the share of rice in the total grain planting area will raise transfer incidence by 0.2–0.4 percentage points, and rice region residents transfer on average 300–400 yuan more in 2011 and about 1,000 yuan more in 2013 to their parents than those from wheat regions. Meanwhile they are more inclined to rely on their adult children for elderly support. Urban citizens are less affected. Using instrumental variable estimation, we are able to prove the effect is causal. With future continued deepening of population aging in China, relying on children for old age support may become more and more unrealistic, the government needs to coordinate the relationship between public transfer and private transfer to ensure the quality of life for the elderly.

Keywords intergenerational transfer      rice culture      interdependent     
Issue Date: 02 May 2018
 Cite this article:   
Yan Liu,Qingqing Zong. Agricultural Roots in Intergenerational Transfers in China[J]. Front. Econ. China, 2018, 13(2): 249-280.
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