In developing countries, aging is in many ways more difficult than in developed countries. In order simply to maintain the same standard of living as they age, people must rely on pensions, their savings and/or their children or other relatives. However, few developing nations offer formal pension plans for rural residents. Nor can they live off of their savings; in developing countries they are generally poor and are not able to accumulate sufficient assets or savings during their lifetimes. Therefore, villagers in developing countries typically rely on their extended family to support them in their old age.1
Life in rural China traditionally has been like rural life in many other developing countries, as families have played an important role in maintaining the elderly's livelihood. As in times past, this still primarily means reliance on the support of sons. In a typical situation, the elderly in rural China live with or next door to one of their sons in an extended family arrangement.2
Mores in rural China, however, are changing rapidly. The rise of off-farm employment and increased mobility are altering the nature of the family in rural China, often leaving the elderly to live on their own after their children move out.3 Changes in family-planning policies that began in the early 1970s have left people with fewer children to provide support. In some cases couples do not have any sons, in other cases a son is not capable or is uncaring.4 The cumulative effect is that many of the elderly find themselves increasingly relying on their own earnings.
Despite the importance of continuing to work into advanced old age in rural China, few studies have tried to understand the phenomenon.5 Although some research related to the labor supply of old people in China and other developing countries has appeared, almost all of it has been conducted at the macro level;6 little research has focused on the perceptions and decisions of the household.
The overall goal of our paper is to understand what drives the elderly's decisions on whether to work or not. We will examine work in a broad sense, including both formal employment-work on the land, off the land for a wage, and earnings from the household's family-run business-and informal work done in the home, taking care of household chores or tending grandchildren. We will illustrate the working patterns of the near-elderly and elderly and develop a profile of the characteristics and strategies of those who still work and of those who do not.
Rural China provides an ideal laboratory in which to study the labor patterns of the near-elderly and elderly. As a result of declining fertility and increasing life expectancy, rural China is undergoing a demographic transition of a kind that can be expected in many other developing countries in the future.7 According to China's 2000 census, 128 million people in China are aged 60 years or older, accounting for 10 per cent of the population. Demographers project that by 2050 those aged 60 and above will reach 400 million, more than doubling as a share of the population.8 Currently, 65 per cent of those older than 60 years of age live in rural areas, whereas the need for a job is driving many younger laborers into the cities.9 Although the rise in the number of elderly and these population shifts portend wrenching changes in the nation's demographic structure, social institutions and labor markets, there is little rigorous economic analysis of the work patterns of those who are over 50, and how they respond to the pressures of aging, ill-health and demographic changes.
To describe the contours of the elderly's employment and to document the patterns of labor activities among different types of work, we will use a data set of 1,199 households that we collected in 2000 from a randomly selected, nearly nationally representative sample of 60 villages in 6 provinces.10 The survey gathered detailed information on household demographic characteristics, wealth, agricultural production, non-farm activities and investment. …