Community-based elderly home care services policy and household consumption enhancement: Evidence from China

Abstract

The influence of elderly consumption is increasing, and community-based elderly home care service (CEHCS), as an important social security system, will have a significant impact on household consumption levels and consumption structure. This paper utilizes data from five batches of CEHCS pilot policies implemented in China from 2016 to 2020, combined with data from the China Health and Retirement Longitudinal Study (CHARLS) from 2011 to 2020, to design a dynamic difference-in-differences model to systematically evaluate the dynamic effects and mechanisms of CEHCS on elderly household non-durable goods consumption. The study found that after the coverage of CEHCS, the consumption levels of non-durable goods such as clothing, daily necessities, and cultural and entertainment products in middle-aged and elderly households significantly increased year by year, while consumption of durable goods significantly decreased. Moreover, the impact of CEHCS was more pronounced in households with lower housing assets and rural households. Mechanism analysis suggests that CEHCS promote the increase in non-durable goods consumption by alleviating children's labor constraints, reducing the family's caregiving burden, and diminishing precautionary savings. This paper provides further empirical evidence on the pathways through which elderly care services influence household consumption behavior, which holds significant implications for proactively addressing population aging and unlocking household consumption potential through micro-institutional design.