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Evaluating Familial Support for the Elderly: The Intrahousehold Allocation of Medical Expenditures in Rural Pakistan

Introduction In this article I examine the determinants of medical expenditures on the elderly in rural Pakistani households, analyzing in particular the dependence of such expenditures on the economic contribution of the elderly to household income. The results for older males are contrasted with those for younger males. Improved life expectancies in the South Asian economies, as in other developing economies, have generated new policy interest in the economic status of the elderly. There is, however, little empirical evidence on this topic. While the scant research on the elderly in South Asia undoubtedly reflects the fact that they represent one of the smallest demographic groups in these economies, it also reflects the widespread belief that they are well provided for by the intergenerational households where the vast majority of them reside with their adult children. However, this assumption has been questioned by a number of scholars who find that medical expenditures on the elderly are closely correlated with the elderly’s individual incomes and wealth. Household data from Pakistan support such claims. Data on individual medical expenditures and days of illness are available from two household surveys: a panel data set collected by the International Food Policy Research Institute (IFPRI) and from the Pakistan Living Standards Measurement Survey (LSMS). Both data sets reveal a strong correlation between the number of days of illness reported by adult males and age, leading one to expect a similarly strong correlation between medical expenditures and age. Instead, the IFPRI data yield a correlation that is less than one would expect given the relationship between illness and age. The LSMS data set, which provides information on many more