AGEING IN ASIA-PACIFIC: Balancing the State and the Family

20TH BIENNIAL GENERAL CONFERENCE, AASSREC

April 4-6, 2013

India’s Support System for Elderly Myths and Realities

K S James Institute for Social and Economic Change Bangalore, India

The Context: Demographic Changes India is experiencing a rapid demographic change

recently

Fertility Rate (TFR) in 2010 is 2.5 close to replacement level

Among 20 major states, 10 states constituting 40 % of India’s population have reached replacement level fertility (less than TFR of 2.1)

At this pace, India is expected to reach replacement level by the second half of this decade

India’s fertility change is unconventional and is not backed by significant socio-economic changes

Population Ageing in India Demographic Changes have wide future

implications for ageing

Currently, there around 100 million elderly in the country constituting 8 per cent of the total population

It is expected to increase to 11 per cent by 2025 and 20 per cent by 2050

By 2030 India will have around 320 million elderly (60 years and above); many times bigger than the total population of many other nations

Who Should Support the Elderly?

Government? (Government enacted a law- The maintenance and welfare of senior citizen act 2007-transferrring the responsibility to the children)

Institutional Support? (Institutional care system, both private and public, remains underdeveloped and hardly exist. Currently, only a small (less than 0.01 per cent) proportion of elderly has access to institutional care)

Family? (It is accepted that family is the sole sources of economic support for the elderly in the country)

The Emerging Questions

Are the families the sole support system for the elderly in India?

Are the adult children contribute significantly for the welfare of the elderly?

This paper is an attempt to understand the economic exchanges between adult to elderly and vice versa in India

The Caveat

With the decline in fertility, the aspiration for ensuring quality children of children in terms of education, health care etc are also increasing in the country

Due to the peculiar nature of fertility transition, the adults with lower number of children are not socio-economically well off so as to accumulate significant savings for the welfare of both children and elderly

Therefore it remains to be seen how far it is feasible to have adults supporting elderly in a poor settings like India

What do elderly aspire?

A survey conducted showed that majority of the elderly consider that children should take care of them during old age (these answers have its own cultural specificity)

54 per cent of the elderly consider that children should support elderly in old age

25 per cent of them considered that elderly should be independent and take care of themselves

21 per cent wish that the government take care of them

Thus the elderly expect economic support largely from children

Motivation and Objective

There is some evidence to suggest that those household having an elderly in India have marginally better off economically than households without an elderly

Therefore, it is important to understand the dynamics of economic support of family to the elderly and vice versa

The purpose is to find out how far the notion of children supporting elderly during old age is true in the country?

Data The data for he study is drawn from a large scale

survey conducted among elderly in late 2011

This study collected information from 9852 elderly from 8329 households across seven states of India

The selected states are demographically more advanced and have already achieved replacement level fertility in the past

More details about the survey can be obtained from our website (www.isec.ac.in/prc)

Sources of Income for the Elderly

Source of Income Source of Income can be divided into two:

1. Factor Income (Factor income includes all earnings from wages or salary as well as asset income like rents, interest on saving, and dividends paid on investments etc)

2. Transfer Income (Transfer income includes benefits from government programmes as well as private pensions and annuities)

It is expected that the main source of income for elderly is from transfer and not factor income

Work Participation

Percentage of Elderly Currently Working According to Place of Residence and Sex, 2011

42.0

11.6

26.2 29.7

9.1

18.5

0

5

10

15

20

25

30

35

40

45

Male Female Total

Rural Urban

Currently working elderly by age and sex, 2011 (in percent), 2011

14.9

5.2 2.7

48.5

27.2

13.2

0.0

10.0

20.0

30.0

40.0

50.0

60.0

60-69 70-79 80+

pe

rce

nta

ge

Women Men

Nearly all working elderly are full time workers (81 % work over 6 months in a year and 94 % work over 4 hours in a day)

Elderly workers are mostly drawn from lower wealth quintiles and have no formal education, belongs to vulnerable social groups and are women living alone

Majority of workers are engaged in unskilled labour-agricultural labourers (28%) with low wages

Characteristics of the Elderly Workers

Per cent Distribution of Currently Working Elderly by the Need to Work at Old Age According to Sex, 2011

Motivation for Work Men Women Total

By choice 32.0 17.6 28.6

Economic/Other compulsion 67.9 82.2 71.3

No answer 0.1 0.2 0.1

Total 100.0 100.0 100.0

Number of elderly 1,716 549 2,265

Majority working due to compulsion are poor (measured by wealth quintiles) and have no or low levels of education

Drawn mainly from widows, SC/ST community and those who live alone

Elderly work in India appears to be due to lack of choice and a means for survival!!

Who works due to compulsion?

87.5 73.5

67.2

49.3 42.5

0

20

40

60

80

100

Lowest Second Middle Fourth Highest

Pe

rce

nt

Wealth Quintiles

Why Not Working?

Among those who are currently not working (but were working in the past), 32 % of men and 47 % of women indicated poor health as reasons for not working

A quarter of them felt that they are too old and weak to work and another 10 % due to disability

Work and Welfare

Work participation at older ages is viewed differently in different contexts

In India, work is more of compulsion and not choice for majority of elderly

This is particularly true for socio-economically vulnerable sections among elderly

Wok is perhaps a necessity for most elders to take care of their basic needs

Assets and Income

Percentage of Elderly by Asset Ownership by Sex, 2011

Type of Assets Men Women Total

Land 50.5 23.6 36.4

House 79.8 45.2 61.6

Housing plot 2.7 1.6 2.2

Gold or jewellery 21.6 29.2 25.6

Savings in bank, post office, cash 30.8 14.7 22.3

Savings in bonds, shares, mutual

funds

0.2 0.1 0.1

Life insurance 2.5 0.7 1.6

Don’t own any asset 11.0 34.1 23.1

Total 4,672 5,180 9,852

Issues Relating to Asset Ownership

The magnitude of land and savings owned by the elderly is small (only 28% of men and 11% of women own more than 1 acre of land and 9% of men and 3% of women have more than Rs 50,000 in savings)

There is a vast gender gap in the ownership of land (51% of men and 24% of women), housing (80 % of men and 46% of women) and savings (32 % of men and 15% of women)

Issues Relating to Asset Ownership

Widowed or separated women are more likely to own assets than currently married women - 28% of widows and separated women own no assets

compared to 43% of currently married women

Only a small percent of elderly have nominated an

heir for the assets owned by them, with children primarily being nominated for land, housing and jewellery and spouses for savings

Transfer Income

Work Benefits Percentage of Elderly Receiving Pension Benefits According to Sex, 2011

Sex Percent receiving

pension

Number of

Cases

Men 16.7 4672

Women 3.0 5180

Total 9.5 9852

Percentage of Elderly Receiving Pension in Different States, 2011

4.2 4.5 4.9

7.5 9.0 9.5

18.1 18.6

0 2 4 6 8

10 12 14 16 18 20

Tam

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Mah

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Od

ish

a

Pu

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b

We

st B

en

gal

Tota

l

Him

ach

al P

rad

esh

Ke

rala

Utilization of National Social Security Schemes

There are three major social security schemes by the

Government, Pension for poor elderly (IGNOAPS), Pension for poor widows (IGNWPS) and More allocation in Public Distribution System (Annapurna)

All meant for Below Poverty Line (BPL) households

Utilisation of the schemes is low among the elderly

IGNOAPS is only 18 % among BPL elderly, IGNWPS is 25 % among BPL widows and Annapurna only 4 %

Non-BPL households are also availing benefits (IGNOAPS:10%; IGNWPS:15 % and Annapurna:0.3%)

Coverage of Health Insurance Schemes

1.6

0.5

0.2

1.2

0.20

1.4

0.30.1

00.20.40.60.8

11.21.41.61.8

Government assisted Private and public health insurance

schemes

Any Other

Pre

cen

t C

ov

ere

d

Men Women Total

Percentage of Elderly by Sources of Current Personal Income According to Sex, 2011 Sources of Income Men Women Total

Salary/Wages/Asset Income 55.6 15.0 34.2

Employer’s pension (government or other)

16.5 6.8 11.4

Social pension (old age/ widow) 13.7 22.4 18.3

No income 26.0 58.7 43.2

Number of elderly 4,672 5,180 9,852

Financial Contribution of the Elderly to the Family

Per cent Distribution of Elderly by their Perceived Magnitude of Contribution towards Household Expenditure, 2011

Proportion of

Contribution

Men Women Total

No income 26.0 58.7 43.3

No contribution 2.8 5.7 4.3

<40% 6.7 8.2 7.5

40-60% 10.6 4.8 7.5

60-80% 13.3 4.2 8.5

80+ 40.4 18.0 28.6

DK/NA 0.2 0.4 0.3

Total 100.0 100.0 100.0

Number of elderly 4,672 5,180 9,852

Percentage Contribution of Elderly towards Household Expenditure, 2011

Purpose of Expenditure * Men Women Total

Daily expenditure 94.3 80.3 88.9

Children’s/

Grand children’s education

20.9 10.4 16.9

Medical expenses 70.6 61.9 67.3

Savings 22.8 9.9 17.9

Loan repayment 10.7 4.1 8.2

Special events 31.0 18.1 26.1

Number of elderly 3,440 2,148 5,588 *multiple response

Financial Dependency of Elderly

Per cent Distribution of Elderly by their Financial Dependency Status According to Sex, 2011

Financial Dependence Men Women Total

Fully dependent 32.6 66.4 50.4

Partially dependent 31.8 21.0 26.1

Not dependent 35.5 12.5 23.4

Don’t know/No answer 0.1 0.1 0.1

Total 100.0 100.0 100.0

Number of elderly 4,672 5,180 9,852

Per cent Distribution of Elderly by Main Source of Economic Support According to Sex, 2011

Source of Economic

Support

Men Women Total

Son 46.8 52.2 49.7

Spouse 7.3 22.0 15.0

Daughter 2.4 4.8 3.7

Others 5.5 6.0 5.8

Not dependent on anyone 37.9 14.9 25.8

Total 100.0 100.0 100.0

Number of elderly 4,672 5,180 9,852

Major Conclusions Households with elderly appears to be marginally

better off than other households due to the contribution of elderly to the households

Elderly work, earn income and also contribute to the household income for daily survival

They work not out of choice but out of compulsion indicating that elderly work is a survival strategy for many households

The work benefits are nearly absent and transfer income covers only a smaller proportion

The assets are universal but the magnitude of assets are minimum

Immediate word recall

(Data: ELSA, HRS, SAGE, SHARE) Source: Skirbekk et al 2012

THANK YOU