Grandfathers and Grandsons: Social Security Expansion and Child Health in China

The New Rural Pension Scheme (NRPS) is a nationwide pension policy that aims to enroll all eligible rural population in China. Enrollee age over 60 in rural areas are eligible to receive at least 70 CNY non-contributory monthly pension. The national pilot of NRPS began with 838 counties in 2009 and covered all counties by the end of 2012. While studies have evaluated its impact on pensioners and their children, very few studies examine its impact on the third generation - their grandchildren.

This article examines the multi-generational impacts of NRPS on grandchildren's health outcomes. We measure the long-term and short-term health outcomes by height-for-age z-scores and BMI, respectively. Data for this study comes from China Family Panel Studies (CFPS) waves 2010, 2012 and 2014. To take advantage of the panel data and control for endogeneity of receiving pension, we use age eligibility as instruments and control for household fixed effects.

We find that receiving pension by older males has significantly positive effects on BMI of grandsons, while the impacts on their height-for-age z-scores are insignificant. We find little evidence that pension has any impact on granddaughters' short-term or long-term health status. The impact of the NRPS on grandsons' BMI is driven by the overweight and obese subsample, while it does not promote BMI of underweight grandsons.

We also find supporting evidence that pension to the elderly may promote unhealthy diet. Specifically, we show that the NRPS changes rural household living arrangements by increasing the likelihood that grandfathers co-reside with grandchildren (both boys and girls). It also encourages adult children to migrate and therefore leave the household. It is very plausible that the lack of information among grandparents and the culture of son-preference may explain the negative short-term health impact on grandsons.