Impact of the Industrialization of Older Adult Care Services on Older Individuals’ Physical and Mental Health: Evidence from China’s Quasi-Natural Experiment

Yang He,1 Wenjing Ouyang,2 Zhenzhen Li,3 Baojian Wei4 1School of Business, Xiangtan University, Xiangtan, 411105, People’s Republic of China; 2Department of Business School, Hunan Normal University, Changsha, 410081, People’s Republic of China; 3Taylor’s University, Subang Jaya, 47500, Malaysia; 4School of Nursing, Shandong First Medical University & Shandong Academy of Medical Sciences, Taian, 271021, People’s Republic of ChinaCorrespondence: Baojian Wei, Changcheng Road, Beijipo Street, Daiyue District, Taian City, People’s Republic of China, Tel +86-15564848382, Email bjwei@sdfmu.edu.cnPurpose: Given the increasing longevity of the population, the consolidation of familial structures, and the scarcity of economic resources required to sustain an aging society, the Chinese government faces a complex and urgent challenge in effectively addressing the growing needs of older adults and establishing a long-term care services system that is both sustainable and equitable.Patients and Methods: This study harnesses the comprehensive CLHLS data from 2011 to 2018 and utilizes the “Pilot Industrialization of Old-Age Service in a Market-Oriented Way” policy as a quasi-natural experiment. Employing the Difference-in-Differences (DID) method, our study aims to evaluate the impact of industrializing older adult care services on the physical and mental health outcomes of older adults in China.Results: The findings strongly indicate that the government’s adoption of a market-driven fiscal approach within its policies, aimed at attracting social capital and fostering the industrialization of older adult care services, positively influences the physical and mental well-being of the aged population. Furthermore, through heterogeneity analysis, it becomes evident that the health promotion effect is particularly pronounced among older individuals living without a spouse, lacking family care from children or grandchildren, or residing in financially underdeveloped regions.Conclusion: In summary, these results underscore the potential efficacy of employing financial policy instruments to facilitate the industrialization of older adult care services, thereby advancing the promotion of a society characterized by healthy aging and ensuring equitable health outcomes for older people.Keywords: industrialization, older adult care, market-driven fiscal policy, physical and mental health, healthy aging, difference-in-differences, Chinese longitudinal healthy longevity survey