The impact of long-term care insurance system on family care: Evidence from China

Abstract

Aims: The inconsistent findings on the impact of the long-term care insurance (LTCI) system on family care require us to extend our study horizon to more countries with LTCI system designs or market practices. China has explored the LTCI system through pilot programs, which provide a quasi-natural experimental environment. This paper aims to examine how the LTCI system affects family care in China.

Methods: We primarily employ the time-varying difference-in-differences method to perform regression analyses based on the panel data from the China Health and Retirement Longitudinal Study.

Results: We discover a 7.2% rise in family care under the LTCI system. Specifically, the LTCI system is more likely to promote family care as the relatively primary care for disabled women, disabled people aged 60-74, and those who cannot fully take care of themselves. In addition, the formal care support policy of LTCI will crowd in both formal care and family care, and the crowding-in-effect on formal care may even obscure the crowding-in-effect on family care. The family care support policy of LTCI may encourage the policy-covered groups to take family care as their relatively primary care. It may also lengthen family care for those groups.

Conclusions: The LTCI system has a crowding-in effect on family care. It can increase family care through cash payments or linking formal and informal care resources by providing formal community and home care.

Keywords: China; family care; formal care; long-term care insurance; time-varying difference-in-differences method.