Effect of Old Age Subsidy on the Mental Health of Older Chinese: Evidence from a Regression Discontinuity Design

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Abstract
China's rapidly growing oldest-old population (aged ≥80) faces significant challenges in financial security. This study sought to quantitatively evaluate the effect of old age subsidy on the mental health of older Chinese. Data were from China Health and Retirement Longitudinal Study 2011-2020, including 27,940 respondents residing in the provinces with a universal old age subsidy policy. Eligibility was restricted to individuals aged ≥80. Fuzzy regression discontinuity analysis evaluated the effects of receiving the subsidy on three mental health outcomes (depressive symptoms, life satisfaction, and cognition). Results showed that individuals just above age 80 who received the subsidy had similar mental health scores compared to those just below age 80 who did not receive the subsidy. The treatment effect was null across all three mental health outcomes, with robust p-values >0.05 and 95% CIs that included zero. Findings remained consistent in subgroup analyses, after adjusting for covariates and comparing different algorithms. There is no strong evidence that old age subsidy significantly improved the mental health of older Chinese. This may be attributed to the study's statistical underpower, low benefit level, improper usage, highly restrictive age eligibility, decreasing impact of financial condition in older age, and other factors.

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