Examining the Diverse Impact of Long-Term Care Insurance on Younger and Less Wealthy Informal Caregivers' Labor Force Participation: A Quasi-Experimental Study in China

Wei Yang, King's College London
Mingming Xu , Sun Yat-sen University
Xingtong Pei, Sun Yat-sen University

This study examines the multifaceted effects of China's recently established publicly funded long-term care insurance (LTCI) program. LTCI has the potential to reduce the informal care burden on family members and enhance their participation in the labor market. Yet, little is known about which specific groups of informal carers benefit the most from this insurance. Using data from the China Health and Retirement Longitudinal Study from 2011 to 2018, we apply a staggered difference-in-differences model and propensity score matching to analyze the impact of LTCI. Our findings reveal that LTCI indeed eases the overall burden on informal carers and significantly promotes their involvement in the labor force. Notably, the positive effects are most pronounced among children and grandchildren caregivers, particularly those from younger age groups. For this cohort, LTCI leads to a substantial annual income increase of 3,761 yuan and a caregiving time reduction of 4.5 hours per month. Further analysis uncovers that the insurance program primarily benefits informal carers providing care to older individuals with lower income and those with backgrounds in farming or informal work sectors. These carers experience a considerable reduction in caregiving burdens and a noteworthy increase in income. In conclusion, our findings emphasize the importance of government intervention in expanding LTCI coverage, with a specific focus on older individuals from lower socioeconomic backgrounds. Such initiatives are crucial for reducing caregiving burdens and alleviating caregiving-associated poverty among vulnerable populations.

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 Presented in Session 44. Impacts of Policies and Policy Reforms