Public Long-Term Care Insurance and Retirement Intentions of Urban Workers: Evidence from China

Tianli Yang and Zhong Zhao
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Tianli Yang: Renmin University of China

No 17642, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The Chinese government announced the pilot of public long-term care insurance (LTCI) policy in 2016. While most studies focus on LTCI's effects on labor supply and retirement behavior, its effect on retirement intentions, which offer certain advantages over actual behavior, remains unclear. This study applies the difference-in-differences design to estimate the effect of LTCI on urban workers' retirement intentions based on the Chinese Longitudinal Healthy Longevity Survey. The results indicate that LTCI significantly increases the probability of intentions to delay retirement and intended retirement age, especially for the LTCI providing both service and cash benefits. Moreover, the effects are larger and more significant among subgroups, including women, self-employed workers and workers' family members with LTCI eligibility, as these sub-samples are more likely to be caregivers and caregivers' effect is larger. Mechanism analysis reveals that LTCI reduces time support within the family and improves mental health, both of which contribute to delayed retirement intentions. The negative effect of mitigating precautionary saving motives caused by LTCI also exists but subtler. Overall, these empirical evidences support that LTCI helps shape workers' retirement intentions.

Keywords: long-term care insurance; retirement intentions; difference-in-differences; China (search for similar items in EconPapers)
JEL-codes: H55 I28 J14 J26 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2025-01
New Economics Papers: this item is included in nep-age, nep-cna, nep-hea, nep-lma and nep-pbe
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