Elderly care burden and household investment behavior: The roles of family income, social security, and long-term care insurance

The rapid aging of China’s population has intensified the burden of elderly care on families, with potential implications for household financial decision-making. While existing research has examined the effects of caregiving on household savings behavior, the impact of eldercare responsibilities on household investment strategies has received little attention. Using data from the China Family Panel Studies (CFPS), we find that elderly care burden significantly reduce households’ participation in risky investments. This relationship is moderated by family income and social security coverage, with higher levels of both mitigating the negative effect. Furthermore, our heterogeneity analysis of Long-Term Care Insurance (LTCI) pilot programs—a key policy initiative launched in 2016 to address eldercare, which indicates that the negative effect of the elderly care burden on risk investment is more pronounced in LTCI pilot cities compared to non-pilot cities. These findings provide new insights into how demographic shifts and policy interventions influence household investment strategies, offering important implications for policymakers aiming to balance eldercare support with economic development objectives in aging societies.