Long-term care insurance and intergenerational transfers in families with disabled older adults in China.

Intergenerational transfers constitute an important dimension of later-life quality of life and economic security and serve as a key margin through which social insurance policies affect family welfare. This study examines the effect of long-term care insurance (LTCI) on intergenerational transfers within elderly families in China. We exploit a staggered difference-in-differences approach, complemented by an event-study design, to assess the impact of LTCI on intergenerational transfers, including downward transfers from older parents to their adult children and upward transfers in the opposite direction. We find that the rollout of LTCI significantly increases the total value of downward intergenerational transfers. Mechanism analysis suggests that LTCI improves older adults' self-reported health and mental health, reduces hospitalizations and inpatient days, and lowers total medical expenses, thereby alleviating financial constraints and facilitating downward transfers. We also find that the effect of the program is more pronounced among higher-income households and those with lower disability levels.