Long‐Term Care Insurance Coverage and Family Care for Older People in Rural Areas: Evidence From China

This study examines the impact of Long-Term Care Insurance (LTCI) on rural family care and adult children's behaviour in China. Drawing on pooled data from the China Health and Retirement Longitudinal Study (CHARLS), this paper exploits the rollout of the LTCI pilots across different cities and identify the effect of LTCI using DID method. Findings show that LTCI reduces family informal care use in China's rural areas by 6.884 h per month. This study also documents substantial effects for older people with more children, cohabitating and severe incapacity. The mechanism of influence indicates that long-term care insurance significantly improves the self-rated health of elderly individuals living with their families and increases the employment probability of adult children, thereby reducing the time children spend caring for their parents. From a policy perspective, LTCI is rapidly covering urban areas in China, and the findings provide an important theoretical basis for further expanding LTCI coverage to more rural areas.