Compensatory Effects of Long-Term Care Insurance on Mental Health Among Rural Older Women: Evidence from China

Background: Rural older women in China face intersecting disadvantages including eroded family support, limited pension coverage, and high social isolation that elevate depressive symptoms. Although Long-Term Care Insurance (LTCI) has expanded rapidly since 2016 to provide both financial protection and formal care services for older adults, whether it can compensate for depleted informal support and protect mental health among this vulnerable population remains unknown. Methods: We used five waves of CHARLS (2011–2020) with 2193 rural women aged ≥60. We employed a staggered difference-in-differences design, complemented by moderation analysis, heterogeneity tests, and time-dependent survival analysis. Robustness checks included Callaway-Sant’Anna DID, placebo permutation and baseline exclusion sensitivity. Results: LTCI reduced depression scores by 0.45 points (β = −0.447, p = 0.028) and depression onset hazard by 36.1% (HR = 0.639, p = 0.009). Benefits were compensatory, concentrated among women lacking regular emotional and financial support from children and those with high social isolation. Heterogeneity analyses demonstrated a pronounced age gradient and a significant education gradient, while care-need and disability subgroups showed directionally consistent but underpowered effects. These findings were robust to supplementary sensitivity checks, including Callaway-Sant’Anna DID, placebo permutation, and baseline-depressed exclusion. Conclusions: LTCI confers meaningful mental health protection for rural older women through compensatory pathways that substitute for depleted informal support. However, benefits are concentrated among younger-old and more-educated women, raising equity concerns. Gender-sensitive implementation with mental health screening, targeted outreach for less-educated women, and community-based enrollment assistance is essential to ensure policy equity.