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Home or institution: A comparative analysis of elderly care efficacy in China

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  • Zhang, Chunfeng
  • Lei, Xiaoyan

Abstract

Institutional care and home-based care represent two fundamental components of elderly care systems across Asian countries. This study leverages the exogenous shock induced by the Long-Term Care Insurance (LTCI) pilot program in China to comparatively assess the efficacy of institutional versus home-based care. The analysis reveals that, relative to home-based care, institutional care more effectively addresses the caregiving needs of the elderly and enhances their access to medical services. However, it also entails higher caregiving costs and may contribute to negative outcomes, such as accelerated cognitive decline, deterioration in instrumental activities of daily living (IADL), and impaired vision, although it does not appear to increase short-term mortality risk. Further investigation suggests that these adverse effects may be linked to limited social engagement and reduced daily activities within institutional settings. These results underscore the critical need for care systems to address not only the basic care and medical requirements of the elderly but also their higher-level needs to improve their overall well-being.

Suggested Citation

  • Zhang, Chunfeng & Lei, Xiaoyan, 2025. "Home or institution: A comparative analysis of elderly care efficacy in China," Journal of Asian Economics, Elsevier, vol. 98(C).
    • Handle: RePEc:eee:asieco:v:98:y:2025:i:c:s1049007825000181
    DOI: 10.1016/j.asieco.2025.101894
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    Keywords

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    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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