Trade liberalization and elderly health: Evidence from micro-level data

Abstract

In the context of an aging population, studying the impact of international trade liberalization on elderly health is an important topic. Based on the China Health and Retirement Longitudinal Study (CHARLS) data from 2015 and 2018, combined with customs tariff data reflecting the trade liberalization level, and using geographical distance as an instrumental variable to address endogeneity issues, this paper empirically tests the impact of import trade liberalization on elderly health and its underlying mechanisms. The study reveals that import trade liberalization significantly improves elderly health, as measured by the prevalence of chronic diseases, and the results are robust. The effects are more pronounced in the elderly who are married males, aged 60–74, have a higher education level, poorer health and cognitive abilities, lower wealth, and reside in central, eastern, and coastal regions. Further mechanism analysis uncovers that import trade liberalization primarily improves elderly health through four pathways: increasing imports of medical products (e.g., medical devices and personal protective equipment), improving environmental quality, enhancing public healthcare service provision (e.g., regional government healthcare expenditure, the number of healthcare institutions, health technical personnel, and patient beds) and elevating the income levels of the elderly.