Evaluating familial support for the elderly: The intrahousehold allocation of medical expenditures in rural Pakistan

Economic Development and Cultural Change

Volumn 47, Issue 3, 1999, Pages 620-656

  Kochar, Anjini ^a  

^a STANFORD UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ELDERLY CARE; HEALTH CARE; INCOME; RURAL SOCIETY; WELFARE PROVISION;

PAKISTAN;

EID: 0032795045     PISSN: 00130079     EISSN: None     Source Type: Journal    
DOI: 10.1086/452422     Document Type: Article

References (45)

1. See, e.g., John C. Caldwell, P. H. Reddy and Pat Caldwell, The Causes of Demographic Change: Experimental Research in South India (Madison: University of Wisconsin Press, 1988); and United Nations, Economic and Social Commission for Asia and the Pacific, Population Aging: Review of Emerging Issues, Asian Population Studies Series no. 80 (Bangkok: United Nations, 1987).
2. See, e.g., John C. Caldwell, P. H. Reddy and Pat Caldwell, The Causes of Demographic Change: Experimental Research in South India (Madison: University of Wisconsin Press, 1988); and United Nations, Economic and Social Commission for Asia and the Pacific, Population Aging: Review of Emerging Issues, Asian Population Studies Series no. 80 (Bangkok: United Nations, 1987).
3. Examples include A. Dharmalingam, "Old Age Support: Expectations and Experiences in a South Indian Village," Population Studies 48 (1994): 5-19; and M. Vlassoff and C. Vlassoff, "Old Age Security and the Utility of Children in Rural India," Population Studies 34 (1980): 487-99.
4. Examples include A. Dharmalingam, "Old Age Support: Expectations and Experiences in a South Indian Village," Population Studies 48 (1994): 5-19; and M. Vlassoff and C. Vlassoff, "Old Age Security and the Utility of Children in Rural India," Population Studies 34 (1980): 487-99.
5. R. A. Bulato, P. W. Stephens, and M. T. Vu, World Population Projections: 1989-1990 Edition (Baltimore: Johns Hopkins University Press, 1990).
6. In contrast, the corresponding figure for the United States is 15%. See Partha Dasgupta, An Inquiry into Well-being and Destitution (Oxford: Clarendon, 1993).
7. A. M. Shah, The Household Dimension of the Family in India (Berkeley: University of California Press, 1974).
8. An individual who was unable to perform his or her daily routine for at least 24 hours, was unable to eat normal food for 24 hours, or required bed rest for 24 hours was considered ill. The numbers correspond to 1.7 episodes per man-year of reporting and 2.1 episodes per woman-year of reporting. The data are reported in Christopher J. L. Murray, Richard G. A. Feachem, Margaret A. Phillips, and Carla Willis, "Adult Morbidity: Limited Data and Methodological Uncertainty," in The Health of Adults in the Developing World, ed. Richard G. A. Feachem, Tord Kjellstrom, Christopher J. L. Murray, Mead Over, and Margaret A. Phillips (New York: Oxford University Press, 1992). The same study also reports data from the U.S. National Health Interview Survey of 1985 that reveal 1.1 episodes of illness per person per year for the older group of 45- to 60-year-olds, based on much weaker criteria - a person was considered ill if he or she had to reduce his or her daily activities for at least half a day.
9. Government of India, Office of the Registrar General, "Survey of Causes of Death (Rural)," in Annual Report 1986 (New Delhi: Ministry of Home Affairs, 1988).
10. According to data in United Nations, Demographic Yearbook (New York: United Nations, 1994), life expectancy at age 60 in India (1986-90) was 14.7 additional years for males and 16.1 additional years for females, while it was 15.5 additional years for males in Bangladesh and 15.8 additional years for females (1988). These data can be compared with life expectancies at age 60 of 20.17 additional years and 24.94 additional years for Japanese males and females, respectively, and of 16.25 and 18.4 additional years in Malaysia.
11. Government of Pakistan, Social Indicators of Pakistan (Karachi: Statistical Division, Federal Bureau of Statistics, 1990).
12. The slow growth of the elderly population during this period undoubtedly also reflects the stagnant population growth of the South Asian economies in the years prior to 1920, when the elderly individuals of 1985-90 were born. Census data, reproduced in R. H. Cassen, India: Population, Economy, Society (New York: Holmes & Meier, 1978), reveal that the population growth rate between the years 1901 and 1921 was only 0.20%. This rate peaked at 2.6% in 1960-65 and has fallen steadily since then. As noted by a referee, the fact that the population growth rate actually fell between 1911 and 1921, largely because of the flu epidemic of 1918, may also explain the decline in the numbers of the elderly in Bangladesh noted below. Data on the growth rate of the elderly population reported in this paragraph are from United Nations, The Sex and Age Distribution of the World Populations: The 1992 Revision (New York: United Nations, 1993).
13. The slow growth of the elderly population during this period undoubtedly also reflects the stagnant population growth of the South Asian economies in the years prior to 1920, when the elderly individuals of 1985-90 were born. Census data, reproduced in R. H. Cassen, India: Population, Economy, Society (New York: Holmes & Meier, 1978), reveal that the population growth rate between the years 1901 and 1921 was only 0.20%. This rate peaked at 2.6% in 1960-65 and has fallen steadily since then. As noted by a referee, the fact that the population growth rate actually fell between 1911 and 1921, largely because of the flu epidemic of 1918, may also explain the decline in the numbers of the elderly in Bangladesh noted below. Data on the growth rate of the elderly population reported in this paragraph are from United Nations, The Sex and Age Distribution of the World Populations: The 1992 Revision (New York: United Nations, 1993).
14. United Nations, Population Aging (n. 1 above).
15. Some examples are Ashish Garg and Jonathan Morduch, "Sibling Rivalry" (Harvard University, 1997, photocopy); Duncan Thomas, "Like Father, Like Son, or, Like Mother, Like Daughter: Parental Education and Child Health," Journal of Human Resources 29, no. 4 (1994): 950-88; Jere Behrman and Anil B. Deolalikar, "The Intra-household Demand for Nutrients in Rural South India: Individual Estimates, Fixed Effects and Permanent Income," Journal of Human Resources 25 (1990): 665-96; Mark M. Pitt and Mark R. Rosenzweig, "Health and Nutrient Consumption Across and Within Farm Households," Review of Economics and Statistics 47 (1985): 212-23; and Mark R. Rosenzweig and T. Paul Schultz, "Market Opportunities, Genetic Endowments, and Intrafamily Resource Distribution: Child Survival in Rural India," American Economic Review 72 (1982): 803-15.
16. Some examples are Ashish Garg and Jonathan Morduch, "Sibling Rivalry" (Harvard University, 1997, photocopy); Duncan Thomas, "Like Father, Like Son, or, Like Mother, Like Daughter: Parental Education and Child Health," Journal of Human Resources 29, no. 4 (1994): 950-88; Jere Behrman and Anil B. Deolalikar, "The Intra-household Demand for Nutrients in Rural South India: Individual Estimates, Fixed Effects and Permanent Income," Journal of Human Resources 25 (1990): 665-96; Mark M. Pitt and Mark R. Rosenzweig, "Health and Nutrient Consumption Across and Within Farm Households," Review of Economics and Statistics 47 (1985): 212-23; and Mark R. Rosenzweig and T. Paul Schultz, "Market Opportunities, Genetic Endowments, and Intrafamily Resource Distribution: Child Survival in Rural India," American Economic Review 72 (1982): 803-15.
17. Some examples are Ashish Garg and Jonathan Morduch, "Sibling Rivalry" (Harvard University, 1997, photocopy); Duncan Thomas, "Like Father, Like Son, or, Like Mother, Like Daughter: Parental Education and Child Health," Journal of Human Resources 29, no. 4 (1994): 950-88; Jere Behrman and Anil B. Deolalikar, "The Intra-household Demand for Nutrients in Rural South India: Individual Estimates, Fixed Effects and Permanent Income," Journal of Human Resources 25 (1990): 665-96; Mark M. Pitt and Mark R. Rosenzweig, "Health and Nutrient Consumption Across and Within Farm Households," Review of Economics and Statistics 47 (1985): 212-23; and Mark R. Rosenzweig and T. Paul Schultz, "Market Opportunities, Genetic Endowments, and Intrafamily Resource Distribution: Child Survival in Rural India," American Economic Review 72 (1982): 803-15.
18. Some examples are Ashish Garg and Jonathan Morduch, "Sibling Rivalry" (Harvard University, 1997, photocopy); Duncan Thomas, "Like Father, Like Son, or, Like Mother, Like Daughter: Parental Education and Child Health," Journal of Human Resources 29, no. 4 (1994): 950-88; Jere Behrman and Anil B. Deolalikar, "The Intra-household Demand for Nutrients in Rural South India: Individual Estimates, Fixed Effects and Permanent Income," Journal of Human Resources 25 (1990): 665-96; Mark M. Pitt and Mark R. Rosenzweig, "Health and Nutrient Consumption Across and Within Farm Households," Review of Economics and Statistics 47 (1985): 212-23; and Mark R. Rosenzweig and T. Paul Schultz, "Market Opportunities, Genetic Endowments, and Intrafamily Resource Distribution: Child Survival in Rural India," American Economic Review 72 (1982): 803-15.
19. Some examples are Ashish Garg and Jonathan Morduch, "Sibling Rivalry" (Harvard University, 1997, photocopy); Duncan Thomas, "Like Father, Like Son, or, Like Mother, Like Daughter: Parental Education and Child Health," Journal of Human Resources 29, no. 4 (1994): 950-88; Jere Behrman and Anil B. Deolalikar, "The Intra-household Demand for Nutrients in Rural South India: Individual Estimates, Fixed Effects and Permanent Income," Journal of Human Resources 25 (1990): 665-96; Mark M. Pitt and Mark R. Rosenzweig, "Health and Nutrient Consumption Across and Within Farm Households," Review of Economics and Statistics 47 (1985): 212-23; and Mark R. Rosenzweig and T. Paul Schultz, "Market Opportunities, Genetic Endowments, and Intrafamily Resource Distribution: Child Survival in Rural India," American Economic Review 72 (1982): 803-15.
20. John Strauss, Paul J. Gertler, Omar Rahman, and Kristin Fox, "Gender and Life-Cycle Differentials in the Patterns and Determinants of Adult Health," Journal of Human Resources 28 (1993): 790-837.
21. Mark M. Pitt, Mark R. Rosenzweig, and M. N. Hassan, "Productivity, Health and Inequality in the Intrahousehold Distribution of Food in Low-income Countries," American Economic Review 80 (1990): 723-46.
22. Here, and in the remainder of the article, the expression "days of illness" used in the context of the IFPRI data refers to the days of work lost because of illness.
23. I define medical expenses to be the sum of the cost of medicines, consultation fees, and any transportation costs incurred in relation to the treatment of illness.
24. These data are reported in Angus Deaton and Christina H. Paxson, "Patterns of Aging in Thailand and the Côte d'Ivoire," Topics in the Economics of Aging, ed. David A. Wise (Chicago: University of Chicago Press, 1992).
25. Michael Grossman, "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy 80 (1982): 223-55.
26. One example of such a model is Pierre-Andre Chiappori, "Collective Labor Supply and Welfare," Journal of Political Economy 100 (1992): 437-67.
27. Examples of this literature include Pitt, Rosenzweig, and Hassan; and Strauss et al.
28. Fumio Hayashi, "The Permanent Income Hypothesis and Consumption Durability: Analysis Based on Japanese Panel Data," Quarterly Journal of Economics 100 (1985): 1083-1113.
29. As noted above, the empirical analysis distinguishes adults by two age groups: 20-45 and older than 45.
30. See, e.g., Pitt, Rosenzweig, and Hassan; and Anjini Kochar, "Smoothing Consumption by Smoothing Income: Hours-of-Work Responses to Idiosyncratic Agricultural Shocks in Rural India," Review of Economics and Statistics (February 1998), in press.
31. While these age demarcations have been arbitrarily chosen, they do reflect the relatively young age of marriage in South Asia, where adult males frequently have their first child at approximately age 25.
32. The overwhelming majority of women report no hours of work, either on their own farms or in the market, which makes estimation of wages for women impossible. Thus I ignore wages of women, under the assumption that the household does not value the leisure time of women or children. However, I allow the number of women and children to act as preference shifters affecting household decisions.
33. The set of regressors varies according to the regression. For example, the regression for older males in intergenerational households includes only the number of males in the younger generation, whereas the regression for males in nuclear households includes only the number of females in each of the two generations.
34. See, e.g., Pitt, Rosenzweig, and Hassan (n. 14 above).
35. The use of a village wage rate to infer the wage applicable to family members assumes that the value of family labor in each activity equals that of hired labor. However, this assumption can be relaxed by using farm production data and hours of family labor by activity to estimate wage rates, not for broad aggregates of male and female family labor, but for male and female family labor in each different activity. I do not conduct such an analysis in this article, leaving it to future work.
36. This has been noted by Dharmalingam (n. 2 above); and also by Pranab Bardhan and A. Rudra, "Terms and Conditions of Labor Contracts in Agriculture, 1979," Oxford Bulletin of Economics and Statistics 43 (1981): 89-111; and by H. P. Binswanger, V. S. Doherty, T. Balaramaiah, M. J. Bhende, K. G. Kshirsager, V. B. Rao, and P. S. S. Raju, "Common Features and Contrasts in Labor Relations in the Semi-Arid Tropics of India," in Contractual Arrangements, Employment, and Wages in Rural Labor Markets in Asia, ed. H. P. Binswanger and Mark R. Rosenzweig (New Haven, Conn.: Yale University Press, 1981).
37. This has been noted by Dharmalingam (n. 2 above); and also by Pranab Bardhan and A. Rudra, "Terms and Conditions of Labor Contracts in Agriculture, 1979," Oxford Bulletin of Economics and Statistics 43 (1981): 89-111; and by H. P. Binswanger, V. S. Doherty, T. Balaramaiah, M. J. Bhende, K. G. Kshirsager, V. B. Rao, and P. S. S. Raju, "Common Features and Contrasts in Labor Relations in the Semi-Arid Tropics of India," in Contractual Arrangements, Employment, and Wages in Rural Labor Markets in Asia, ed. H. P. Binswanger and Mark R. Rosenzweig (New Haven, Conn.: Yale University Press, 1981).
38. Hanan Jacoby, "Shadow Wages and Peasant Family Labor Supply: An Econometric Application to the Peruvian Sierra," Review of Economic Studies 60 (1993): 903-21.
39. While lagged hours of work may also affect current health, this effect will be incorporated in start-of-period health indicators (BMI, lagged days of illness), so that lagged hours are not likely to be a component of the error term.
40. Jere Behrman and Anil B. Deolalikar, "Will Developing Country Nutrition Improve with Income? A Case Study for Rural South India," Journal of Political Economy 95 (1987): 108-38.
41. Thomas E. MaCurdy, "A Simple Scheme for Estimating an Intertemporal Model of Labor Supply and Consumption in the Presence of Taxes and Uncertainty," International Economic Review 24 (1983): 265-89; and Richard Blundell and Ian Walker, "A Life Cycle Consistent Empirical Model of Family Labor Supply Using Cross-Section Data," Review of Economic Studies 53 (1986): 539-58.
42. Thomas E. MaCurdy, "A Simple Scheme for Estimating an Intertemporal Model of Labor Supply and Consumption in the Presence of Taxes and Uncertainty," International Economic Review 24 (1983): 265-89; and Richard Blundell and Ian Walker, "A Life Cycle Consistent Empirical Model of Family Labor Supply Using Cross-Section Data," Review of Economic Studies 53 (1986): 539-58.
43. As noted by Blundell and Walker, there is no need to explicitly include some measure of the individual's time endowment, since its effect gets absorbed in the wage coefficient.
44. See, e.g., Angus Deaton, "Saving and Income Smoothing in Côte d'Ivoire," Journal of African Economies 1 (1992): 1-24.
45. In the interest of brevity, I did not include in this article the results of the various probit regressions used to generate Mill's ratio in each of the reported regressions. However, they are available from me on request.