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Does public long-term care insurance affect spousal labor supply? Evidence from China

Author

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  • Han, Xiao
  • Liu, Zining
  • Zheng, Wei

Abstract

This study examines whether public long-term care insurance influences spousal labor supply in China, a question that remains underexplored in the literature. Using nationally representative panel data from China Health and Retirement Longitudinal Study, we employ a staggered difference-in-differences design combined with propensity score matching to identify causal impacts. Our results show that long-term care insurance increases spousal labor force participation by 17.8 percentage points and annual working hours by 227 h, with most gains concentrated in self-employment. These effects are accompanied by reduced informal caregiving and increases in non-work physical activity and food consumption, suggesting a reallocation of household time and resources. The impacts are stronger in programs targeting only the severely disabled and offering the cash benefits option. Overall, LTCI extends beyond elderly care, promoting labor market engagement in aging societies.

Suggested Citation

  • Han, Xiao & Liu, Zining & Zheng, Wei, 2025. "Does public long-term care insurance affect spousal labor supply? Evidence from China," Economic Modelling, Elsevier, vol. 153(C).
    • Handle: RePEc:eee:ecmode:v:153:y:2025:i:c:s0264999325003505
    DOI: 10.1016/j.econmod.2025.107355
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    Keywords

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    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I10 - Health, Education, and Welfare - - Health - - - General

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