AGEING AND INTERGENERATIONAL TRANSFERS : THE ISSUES

Abstract

Traditionally, population ageing, or the increase in the share of the elderly persons in a population, has been a phenomenon that was associated only with the industrial countries of the West. However in recent decades, trends of declining fertility rates, a dominant cause of population ageing, have began to surface in less developed countries as well. While it is true that population ageing in these countries is still at the relatively early stages, the projected rate of increase in the elderly population for the near future, on the other hand, is staggering. This is most disconcerting as it implies that these less developed countries will be achieving levels of population ageing at much lower levels of per capita income than the industrial countries did, and would probably therefore not have sufficiently developed social security programs for universal coverage. As such, informal support systems have been encouraged to take on a larger share of the burden of supporting the elderly.

The main informal system of elderly support is that of the family, within which private intergenerational transfers plays the dominant role. The flow of such transfers is highly dependent on the familial structure and the living arrangements of the aged persons. It has been found that elderly persons are more likely to receive such informal support if they reside with a spouse, have a greater number of children and are a part of an extended household. Given their significance, familial and household structures have been termed the infrastructure of informal elderly support in this thesis.

However, demographic factors that result in population ageing are also changing the family structure such that it reduces its capacity as the primary care-giver of the elderly. In addition, with economic development, social, occupational and geographical mobility increase leading to the weakening of family ties and reduction of availability of informal elderly support. It has been therefore concluded that private intergenerational transfers cannot be relied on as the sole pillar of support for the elderly and that an appropriate mix of public and private intergenerational transfers must be found to form a multi-pillar system support for aged persons. It is found that private intergenerational transfers are the main source of economic support for the elderly in Asian countries, while for Western countries, public intergenerational transfers via public social security programs play the leading role. In addition, the elderly in Asian countries have a higher tendency to be currently married, have a relatively lager number of children and reside within a large or extended household as compared to the Western elderly, implying that the infrastructure for informal aged support in the former appears to supersede that of in the latter. This study concludes that Western countries should intensively and extensively encourage the "building" of informal elderly support infrastructure to avert the old-age crisis and that Asian countries should take precautions to avoid the adverse side-effects of economic development on informal systems for elderly support.