Examining the Impact of Long-Term Care Insurance on the Care Burden and Labor Market Participation of Informal Carers: A Quasi-Experimental Study in China

Abstract

Objectives: Existing evidence from high-income countries suggests that policies aimed at enhancing access to formal care can reduce the burden on informal carers and facilitate their reentry into the labor market. However, there is limited evidence regarding the specific carers who have been most affected by such insurance. This study focuses on China's long-term care insurance (LTCI) and examines its effects on informal care burden and the labor market participation of different types of informal carers.

Methods: Drawing data from the China Health and Retirement Longitudinal Study of 2011, 2013, 2015, and 2018, we employ a staggered difference-in-differences (DID) model with propensity score matching to analyze the impact of LTCI. To explore time-varying DID estimates, we adopted the DID event study design.

Results: Our study demonstrates that LTCI substantially alleviates the burden on informal carers while markedly boosting labor market participation. Notably, we found a more pronounced decrease in care burden among spouses, amounting to a reduction of 8.5 hr per month. Concurrently, LTCI's impact on enhancing labor market participation was more significant among younger household members, reflected in an average income increase of 4,534 yuan per year. Furthermore, subgroup analysis highlights that LTCI primarily benefits informal carers providing care for older people with low income or those who were farmers or previously engaged in informal sectors.

Discussion: Our study demonstrates that LTCI has led to a reduction in care burdens and an enhancement in labor market participation. The impact is especially pronounced for informal carers of older people with low income or those with backgrounds in farming or informal work sectors.

Keywords: China; Informal carer; Labor market participation; Long-term care insurance; Staggered difference-in-differences.