Economic Contribution of the Aged: A National Profile
With the inversion of the age pyramid, the dependency ratio increases sharply, placing greater pressure on the younger generations. This trend has been used to argue that ageing represents a tax on the younger generations. In Chap. 4, we critically examine the evidence in support of this proposition, with an analysis of National Sample Survey Office (NSSO) data from the 55th and 68th rounds.
The analysis focuses on two aspects: financial contribution of the aged to their families and whether this contribution helps to reduce poverty levels in India. Gross financial contribution is defined as the income earned by the aged as the percentage of total household expenditure; net financial contribution, on the other hand, is net income (income less consumption) of the aged as the proportion of household expenditure.
Another way of assessing the economic contribution of the aged is to exclude their income from household income and assume that the remaining income is redistributed among only the non-aged members. Two measures of poverty may be calculated—the first measure is based on the complete NSSO data and the second after excluding the aged sub-sample.
This chapter estimates gross and net financial contributions of the aged, regional variations in net financial contribution, and changes in poverty levels after dropping the aged sub-sample.
KeywordsPoverty levels Choropleth maps Financial contribution of the aged Ageing India
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