Study On The Impact Of Long-term Care Insurance On The Younger Elderly’s Labor Supply

The process of population aging in China is accelerating,with the size of the workingage population shrinking and the size of the elderly continuing to expand.The size of the labor force is further reduced by the general tendency of workers to retire early,motivated by pensions.At the same time,life expectancy per capita in China is increasing,and the power potential of the elderly is gradually emerging.However,the legal retirement age in China is still 60 years old for men,55 years old for female cadres and 50 years old for female workers.The elderly are not only unable to enjoy treatment such as work injury insurance and lack systematic legal protection and policy support,but also lack suitable jobs and job search channels.Therefore,China’s elderly labor resources are not fully developed,and the labor supply remains at a low level for a long time.Then,in the context of the labor shortage in China,the development of labor resources for the younger elderly becomes a key initiative to reverse China’s aging dilemma.By combing relevant literature,this paper finds that there are theoretical paths for longterm care insurance to affect the labor supply of the younger elderly.To this end,this paper finds that long-term care insurance increases the labor supply of the younger elderly through the industrial effect by constructing an overlapping generations model that includes the behaviors of old-age re-employment,formal caregiving,and informal caregiving.This paper then constructs a time-varying difference-in-differences model containing two-way fixed effects based on the 2011-2018 CMDS to empirically test the policy effects of long-term care insurance on the labor supply of the younger elderly and finds that the implementation of long-term care insurance promotes the employment rate,working hours,and wage rate of the younger elderly to increase by 3.58,14.00,and 7.55 percentage points,respectively.These boosting effects are more pronounced for younger elderly who are female,nonagricultural,and not involved in intergenerational care activities.Long-term care insurance affects the income and expenditure of the basic pension fund through the labor supply of the younger elderly.Holding the anchored income replacement rate constant,the introduction of long-term care insurance would increase the basic pension fund receipts by 944.29 yuan per person per year,equivalent to a saving of about 8.52 percentage points in pension insurance expenditures.This paper then proposes policy recommendations to improve the long-term care insurance system and to promote the development of human resources for the younger elderly: first,steadily promote the construction of the long-term care insurance system;second,strengthen the construction of care service institutions,increase the training of professional caregivers,and improve the quality of care services;third,expand the supply of re-education resources for the elderly,improve the labor literacy of the elderly,and achieve active aging.