Do the aged contribute to the economic well-being of the family? Evidence from India

Mousumi Dutta, Presidency University
Zakir Husain, Indian Institute of Technology, Kharagpur
Antara Dhar, University of Calcutta

The prolonging of the life cycle with improvements in medical technology has led to an increased share of aged in population. The role to be played by the aged in society and their households has, therefore, become an important social and economic issue. Initial studies on ageing societies viewed the aged as a burden on societies and their families. This led to a focus on the transfer of resources to the aged. In recent years, studies have recognised that reverse flow of resources from the aged to their families is also an important form of transfer. This implies that the aged can become an asset to families, paving the way for active ageing. Using all-India data from the "Employment and Unemployment" survey conducted by National Sample Survey Office (NSSO) in 2011-12, we estimate the gross and net financial contribution of elderly workers, and examine their determinants using suitable econometric models. This is followed by a re-estimation of Planning Commission poverty estimates based on monthly household expenditure after deducting net contribution of aged. It is found that poverty levels (measured by the Head Count Ratio) do not change significantly in rural areas of all states, urban poverty increases in almost all the states. Results also indicate that intensity of poverty (captured by Foster-Greer-Thorbecke index) would have risen substantially in most states without the contribution of aged workers.