Impact of long-term care insurance on the financial asset allocation of middle-aged and elderly households: Evidence from China

Zhanqiang Shao and Chen Chen

International Review of Financial Analysis, 2024, vol. 95, issue PC

Abstract: In the context of China's aging process, optimizing financial asset allocation of middle-aged and elderly households is an essential way to meet the diversified old-age security needs and do a good job in aging finance. To enrich the understanding of the “limited participation puzzle” in the financial market of middle-aged and elderly households in China, this paper takes the long-term care insurance (LTCI) pilot policy as a quasinatural experiment; takes the China Health and Retirement Longitudinal Study (CHARLS) data from 2011 to 2018 as the research sample; and empirically tests the influence, internal mechanism and heterogeneity of LTCI on the financial asset allocation of middle-aged and elderly households using difference-in-differences (DID) and intermediary effect models. The findings are as follows. First, LTCI can significantly promote middle-aged and elderly households’ participation in risky financial markets, and this finding still holds under a series of robustness tests. Second, LTCI can promote the financial asset allocation of middle-aged and elderly households by improving their heath capital. Third, the effects of LTCI pilot policies on the income level and household registration of middle-aged and elderly households significantly differ. The effect of LTCI is more obvious in the sample of high-income and urban households than in the sample of low- and middle-income and rural households. These results help provide a policy basis for realizing the innovation of the economy and financial market products in a deeply aging society and facilitating organic connections between these products.

Keywords: LTCI; Middle-aged and elderly households; Financial asset allocation; DID; China (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521924004484
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:95:y:2024:i:pc:s1057521924004484

DOI: 10.1016/j.irfa.2024.103516

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().