Abstract
“Three generations under one roof” is an old Chinese saying used to describe a desired living arrangement. The traditional concept of happiness for a Chinese elderly person is being able to “play with grandchildren with candy in mouth, enjoy life with no cares.” In a fast-changing economy like China, how does society, especially the elderly themselves, view these traditional values? Using the 2005 Chinese General Social Survey, we study the determinants of happiness of the Chinese elderly. We are particularly interested in whether living with their child and whether living with their grandchild affect the happiness of the elderly. An important empirical concern is that unobserved permanent income may affect both the living arrangements of the elderly and their level of happiness. We include property ownership variables as proxies and also adopt an instrument variable approach to identify the causal relationship between the elderly’s happiness and their living arrangements. We find that, conditional on living with a grandchild, living with one’s child has a negative effect on the elderly’s happiness. Furthermore, elderly Chinese who live with grandchildren are associated with a much higher degree of happiness than their counterparts.
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Notes
Besides the definition stated above, an alternative definition of an ageing society is one with the population above the age of 65 accounted for 7% of the total population. This particular portion of population in China reached 6.96% in 2000 (The Fifth Census, National Bureau of Statistics of China).
Source: the Statistical Communiqué of the People’s Republic of China on the 2009 National Economic and Social Development.
Oswald (2007) points out that the IV method is among ones that build causality between two variables.
Total family income combines all sources of income from the elderly’s family members, including wages, various bonuses, allowances, profits, dividends, net income from businesses, interest from bank deposits, and contributions from relatives and friends.
A possible proxy for permanent income is the gross square footage of the house where the elderly person resides. Empirically however, it has too many missing values in the data set we use (2005 Chinese General Social Survey). As a result, the number of rooms of a house is adopted as a variable.
As permanent income is not measurable, proxy variables that we use for I i may be contaminated with measurement error that lead to bias in estimating the effect of permanent income on the elderly’s happiness. As mentioned in footnote 9, estimates from instrumenting both family income and living arrangement do not different greatly from the reported main estimates. As a result, we choose not to deal with the measurement error in permanent income.
Due to concerns over the existence of the unobserved factors, we also choose to not include some attitudinal variables that are common in the literature, such as comparing economic status with others, how often one contacts relatives and friends, and opinions on important issues etc, as they might be outcome variables as well and have similar problems of endogeneity.
Due to the cross-sectional nature of our data, we can not eliminate this unobserved factor by comparing changes in individual happiness between periods. Also note that the endogenous variable “living with their children” is dichotomous. Angrist and Krueger (2001) state that, even if the underlying second-stage relationship is nonlinear, linear instrumental variables estimates typically capture an average effect of economic interest analogous to the LATE parameter for dummy endogenous regressors.
As empirically, less than 3% of our sample elderly are working, we choose not to control for this variable. Furthermore, Knight et al. (2009) raise a concern that income may also be endogenous. They use years of education of a respondent’s father and spouse as the instrumental variables of the income variable. We also use these instrumental variables to estimate our model. Since the results do not vary much, these results are not reported.
As all elderly have been married at some point, and if they are married, almost all of them live together, we do not control for the marital status in the study.
We note that the self-rated health may itself be determined by variables that contribute to an elderly’s happiness and are not observed to us. If this is the case, inclusion of this variable may create a bias. Qualitatively, empirical results do not vary much whether we choose to include the variable or not. In the reported version, we choose to include this variable.
The statute can be seen at this web page http://trs.molss.gov.cn/was40/mainframe.htm
The 2005 CGSS does not distinguish between an biological child, a stepchild or an adopted child.
These results are available upon request.
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Acknowledgments
Data analyzed in this paper were collected by the research project “China General Social Survey (CGSS)” sponsored by the China Social Science Foundation. This research project was carried out by Department of Sociology, Renmin University of China & Social Science Division, Hong Kong Science and Technology University, and directed by Dr. Li Lulu & Dr. Bian Yanjie. The authors appreciate the assistance in providing data by the institutes and individuals aforementioned. The views expressed herein are the authors’ own.
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Chyi, H., Mao, S. The Determinants of Happiness of China’s Elderly Population. J Happiness Stud 13, 167–185 (2012). https://doi.org/10.1007/s10902-011-9256-8
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DOI: https://doi.org/10.1007/s10902-011-9256-8