Abstract:

"One person's incapacity, the whole family's imbalance", incapacity brings financial burden and care pressure to the family, and inhibits family consumption; long-term care insurance provides care services and financial support, which is expected to be an effective measure to prevent the risk of incapacity. This paper constructs an OLG model that includes the risk of incapacity and long-term care insurance, and theoretically examines the impact on household consumption; using 2011–2018 CHARLS data and a fixed–effects model, it empirically examines the effects and mechanisms of the impact on household consumption. The results show that incapacity inhibits household consumption by increasing medical care costs and reducing the labor supply of family members; long-term care insurance helps to raise the level of consumption, promote consumption upgrading, and alleviate consumption inequality. This paper expands the research on the effects of long-term care insurance policies at the household level, and at the same time, it is of practical significance for house- holds to improve their ability to cope with the risk of incapacity.

Key words:

disability risk, long–term care insurance, household consumption, consumption structure upgrading, consumption inequality

 ,