Impact of the Industrialization of Older Adult Care Services on Older Individuals' Physical and Mental Health: Evidence from China's Quasi-Natural Experiment.

Abstract

Given the increasing longevity of the population, the consolidation of familial structures, and the scarcity of economic resources required to sustain an aging society, the Chinese government faces a complex and urgent challenge in effectively addressing the growing needs of older adults and establishing a long-term care services system that is both sustainable and equitable. This study harnesses the comprehensive CLHLS data from 2011 to 2018 and utilizes the "Pilot Industrialization of Old-Age Service in a Market-Oriented Way" policy as a quasi-natural experiment. Employing the Difference-in-Differences (DID) method, our study aims to evaluate the impact of industrializing older adult care services on the physical and mental health outcomes of older adults in China. The findings strongly indicate that the government's adoption of a market-driven fiscal approach within its policies, aimed at attracting social capital and fostering the industrialization of older adult care services, positively influences the physical and mental well-being of the aged population. Furthermore, through heterogeneity analysis, it becomes evident that the health promotion effect is particularly pronounced among older individuals living without a spouse, lacking family care from children or grandchildren, or residing in financially underdeveloped regions. In summary, these results underscore the potential efficacy of employing financial policy instruments to facilitate the industrialization of older adult care services, thereby advancing the promotion of a society characterized by healthy aging and ensuring equitable health outcomes for older people.