Bittersweet: Grandparenting and elderly mental health in the two-child policy era

We exploit China's universal two-child policy and variations in adult children's birth cohort to examine the causal impact of the family-planning policy on grandparenting and elderly mental well-being. Using a difference-in-differences design, we find that the policy significantly increased the number of grandchildren and intensified grandparental involvement—raising informal caregiving, weekly hours spent, co-residence, and contact with adult children. These changes were accompanied by a 6.8 % increase in CESD-10 depression scores and 8.9 %–14.3 % increase in underlying symptoms such as restless sleep, irritability, difficulty concentrating, and hopelessness. We find no significant changes in income, consumption, or healthcare use, suggesting that the mental health effects are most plausibly driven by increased caregiving demands. The impacts are most pronounced among urban and paternal grandparents, especially paternal grandmothers. Despite these declines, we find no evidence of elevated risk of severe clinical depression.