Do Public Transfers Crowd Out Private Transfers from Adult Children to Their Empty-Nest Older Parents in Rural China? The Role of Grandchild Care

Rural China has been experiencing a significant rise in empty nesters among older adults, a mixed consequence of contemporary social issues such as population aging, urbanization, and migration. Focusing on rural older populations who have traditionally relied on private transfers from adult children as well as public assistance, this study used data from the China Health and Retirement Longitudinal Study 2018 and the propensity score matching method to investigate the crowding-out effect of China’s primary public assistance program, Dibao, on financial transfers from adult children to their empty-nest older parents and older parents’ relationship satisfaction with their adult children. Our findings reveal that Dibao significantly reduced financial transfers from adult children to their empty-nest older parents but enhanced older parents’ relationship satisfaction with their adult children. Furthermore, this crowding-out effect was more significant in irregular and cash transfers, and among those with lower capability of engaging in grandchild caregiving. These results suggest a complex dynamic wherein Dibao reduced financial contributions from adult children to their older parents in rural China. This study contributes to understanding the mixed effects of social assistance programs on intergenerational transfers and relationships in the context of the rapidly changing social structure in China.