How China's 2016 Long-Term Care Insurance Rollout Affected Workers

China introduced long-term care (LTC) insurance in 2016, aiming to reduce risks for those needing long-term care. This policy's impact on workers with and without informal coverage was examined. Workers eligible for public LTC insurance reduced their work hours and labor participation, suggesting that public insurance helped lessen uninsured risks. However, those with strong informal insurance barely showed any change. This indicates that while formal insurance offers some relief, it's not as significant when informal insurance is robust. The study also found that the anticipated use of formal care services increased, which supports the findings about public insurance's limited role in risk-sharing. Despite this, the importance of formal insurance is growing, particularly in scenarios where informal insurance isn't as prominent. This implies that formal insurance can play a notable part in risk management.