Enhancing Older Household Consumption: The Impact of Long-Term Care Insurance in China.

This article investigates the impact of long-term care insurance (LTCI) on consumption patterns among older Chinese households using harmonized data from the China Health and Retirement Longitudinal Study (CHARLS) and a difference-in-differences analytical approach. Findings indicate that LTCI enrollment significantly increases total, per capita, and enjoyable consumption, with more pronounced effects in rural and disabled households compared to urban and nondisabled ones. The study interprets these results through precautionary savings and consumption smoothing theories, suggesting LTCI reduces financial uncertainty related to future care needs, thereby encouraging current consumption. These insights highlight LTCI's role in enhancing the financial security and well-being of older adults and underscore the importance of expanding and tailoring LTCI policies to address urban-rural disparities and the needs of disabled older populations in China.