Over the past two decades, China has pursued an ambitious plan to establish an accessible and affordable health system that meets the needs of its population. As part of this journey, China’s leadership implemented comprehensive health system reforms and achieved near-universal health insurance coverage at a relatively low per capita income level. Key to this process was the integration of rural and urban resident health insurance programs, which has proven to yield positive outcomes in health care utilization, physical health, and related equity issues. Thus far, however, the integration’s potential psychological effects have been understudied.

New research, published in the journal Health & Social Care in the Community, addresses this gap in the literature. The researchers – Stanford health economist Karen Eggleston, the director of APARC’s Asia Health Policy Program (AHPP); Peking University’s Gordon Liu; and Renmin University of China’s Yue-Hui Yu and Qin Zhou, the latter a former visiting scholar with AHPP – find that the urban-rural health insurance integration has been beneficial for improving mental health among China’s rural adults.

Their study underscores the potential of policy-driven health system reforms to address longstanding disparities, promote mental well-being in vulnerable communities, and enhance quality of life among aging populations. This is the researchers’ final installment in a series of studies on China’s urban-rural health insurance integration.

• Sign up for APARC newsletters to receive our scholars' research updates >
• Learn more about Dr. Eggleston's related research project, "Addressing Health Disparities in China" > 

Tracking Mental Health Over Eight Years

For decades, China had a fragmented health insurance system, which led to disparities between different populations and hindered the implementation of the Healthy China 2030 blueprint, a bold national strategy to make public health a precondition for all future economic and social development. Responding to this challenge, in 2016, China announced plans to unify its rural and urban health insurance programs. The unified health insurance system, called Urban and Rural Residents’ Basic Medical Insurance (URRBMI), offered equal health service packages and insurance benefits to rural and urban residents. Studies have shown that the integrated system improved healthcare access for nearly 800 million rural residents and helped reduce coverage gaps and inequality. Yet evidence about the integration’s potential psychological impacts has been limited.

Eggleston and her co-authors hypothesized that this reform might also benefit rural adults’ psychological well-being. To test this hypothesis, the researchers conducted a comprehensive analysis using data from the China Health and Retirement Longitudinal Study (CHARLS), a nationally representative survey that tracks health, economic, and social variables among Chinese adults aged 45 and older. The study focused specifically on rural residents, examining changes in mental health, particularly depressive symptoms, before and after the insurance integration. Data from four waves of CHARLS, spanning from 2011 to 2018, allowed the team to analyze trends over a substantial period.

The researchers used an event study combined with a time-varying difference-in-differences (DID) approach, capturing the effect of the health insurance integration on depressive symptoms and comparing changes over time between those affected by the reform and a control group not yet impacted (since local governments introduced the integration reforms in different years, samples in the control group had constantly entered the treatment group during the survey period). This method helps isolate the effect of the policy from other confounding factors, providing a clearer picture of causality. The researchers further examined the heterogeneity of the integration effect across subgroups by gender, age, health status, and family economic status. They also analyzed possible mechanisms through which the reform produced psychological effects

Key Findings: A Significant Drop in Depression

The researchers find that the health insurance integration was associated with a measurable reduction in depressive symptoms among rural seniors. Specifically:

• CES-D scores – a standard measure of depression severity (using a version of the Centre for Epidemiological Studies Depression Scale) – decreased by an average of 0.441 points among those covered by the reform.
• The likelihood of experiencing depression dropped by approximately 3.5% in the post-reform period.
• The decline in depression scores following the integration was continuous, suggesting cumulative effects of the reform. Notably, some psychological benefits appeared up to two years before the reform took effect, likely due to public awareness and positive expectations generated by advance announcements from local authorities.

The results were statistically significant, indicating that the health insurance integration reform has significantly improved the mental health of rural adults and reduced their risk of becoming depressed.

The findings also indicate that a key driver that produced continuous positive psychological effects was the integration’s reduction of health care costs for rural residents, particularly for hospital care. By lowering financial barriers to treatment, the integration improved access to healthcare and made its use more equitable. This, in turn, boosted rural adults’ satisfaction with their health and overall sense of well-being. The improvement may have set off a positive cycle, encouraging more social engagement and physical activity, which helped further ease symptoms of depression.

While the reform reduced depressive symptoms for both male and female older adults, the findings revealed differences across subgroups. It appears the reform did not significantly reduce depressive symptoms for those aged 40-49 and over 70, individuals in poor health, or those in the lowest economic bracket. The researchers attribute this to ongoing financial barriers and limited insurance financing, which may blunt the perceived benefits for high-need groups.

Policy Implications: A Path Toward Health Equity

The study’s co-authors highlight several policy implications for China:

• Expand and standardize coverage: Build on the success of the URRBMI by moving from local-level integration to broader provincial or national coverage, and encourage enrollment among vulnerable populations through subsidies.
• Improve equity for high-need groups: Design more targeted insurance policies for older adults, those with chronic illnesses or disabilities, and low-income groups, especially by covering outpatient treatments for high-cost conditions.
• Increase funding for the URRBMI: Despite progress, reimbursement rates remain low, highlighting the need for greater investment in the program.
• Strengthen rural health infrastructure: Insurance reforms must be paired with improvements in rural healthcare facilities and services to ensure quality care is both accessible and effective.

China’s experience offers valuable lessons for countries aiming to achieve universal health coverage and those grappling with health disparities and aging populations. The positive association between insurance integration and mental health among rural adults in China underscores the importance of comprehensive, inclusive policies addressing financial and social determinants of health.

The study’s findings highlight the need to ensure that the most vulnerable populations benefit equally from health reforms. They also serve as a compelling reminder that thoughtfully designed and implemented reforms can improve physical health and increase mental resilience and social cohesion.

Demographic shifts worldwide have increased the number of older workers, and many economies are facing a critical question: Are their labor markets ready to support older workers?

Researchers have found that, in the United States, the surge of older workers has gone hand–in-hand with an increase in the number of “age-friendly jobs” – roles with working conditions more suitable for aging employees, such as placing fewer physical demands or offering greater scheduling flexibility. Yet it remains unclear whether comparable trends have taken hold in other aging economies.

A new study, published in the Journal of the Economics of Ageing, helps fill in this gap by examining the evolution of age-friendly jobs in South Korea (hereafter Korea), where the number of workers aged 50 and over increased by 165 percent from 2000 to 2023. Korea is now officially considered a "super-aged" society, and the government is doubling down on its efforts to bolster the workforce.

The study, co-authored by Hyeongsuk Kim and Chulhee Lee, both of Seoul National University, and Stanford health economist Karen Eggleston, the director of APARC’s Asia Health Policy Program, examines Korea’s workforce and economy to determine whether the nation significantly expanded its 50+ workforce by creating job opportunities favorable for older workers or if some other mechanism is at play. 

The co-authors examined the job characteristics experienced by older Koreans relative to their younger counterparts and U.S. older workers. Second, they analyzed data collected in 2020 about Korean workers, evaluating their jobs based on various parameters in the Age-Friendliness Index (AFI), a tool that measures the degree to which jobs are more suitable for older workers. The researchers considered AFI factors such as the requirement for heavy physical activity, the pace of the job, and the possibility of telecommuting. They also examined how the number of age-friendly jobs changed from 2000 to 2020.

• Sign up for APARC newsletters to receive our scholars' research updates >

• Learn more about Dr. Eggleston's related research project, "Innovation for Healthy Aging" >

  ---

The study finds that, while age-friendly jobs have increased in Korea, the number grew more slowly than in the United States, indicating that the U.S. market responded more quickly to changes in workforce demographics. Furthermore, the study indicates that older Koreans were not the main beneficiaries of age-friendly jobs. Instead, women and college-educated workers benefited more from these jobs, while non-college-educated men have seen fewer gains. “These results highlight the uneven adaptation of Korea’s labor market to demographic change and suggest that social norms and labor market frictions shape age-friendly job creation and who benefits from those jobs,” the researchers write.

The study also unveils that, in Korea, the working conditions of employees aged 50–61 differ significantly from those aged 62 or older. Despite the nation's high employment rates for those aged 65 and older, the researchers discovered that a third of working Koreans over the age of 62 held jobs requiring heavy physical activity and earned lower wages. Additionally, only a little over one-fifth of them had jobs that allowed for “mostly sitting.”

Labor Market Frictions

The study’s authors propose several explanations for why Korea’s economy, despite a significant increase in older workers, has not adapted as quickly as the United States in placing these workers in age-friendly occupations. One reason is Korea's comparatively low level of pension support, which forces workers to fill a disproportionate number of low-skilled, temporary, and day jobs. It may be that many older workers are forced to work, regardless of whether the jobs are friendly to their needs. Another reason may be the rigidities of the labor market, including strong protections against employees being laid off. Such protections are beneficial for workers, but they restrict companies' ability to restructure their workforce. Moreover, the role of chaebol, or large corporations, may also be significant. Although chaebol are producing and selling more, they have also increased automation and resorted to outsourcing instead of hiring additional workers.

Older workers in Korea are also facing competition from women for age-friendly jobs. The researchers noted significant gender-related changes in the country's education and employment levels. In 2009, the percentage of women enrolling in college surpassed that of men, and the percentage of women in the workforce increased by 2.5% from 2000 to 2023. Korean women are likely to have an even stronger preference for the flexibility of age-friendly jobs than American women because of gendered responsibilities for household production.

The study’s results, researchers said, reinforce key findings from previous studies: "that 'age-friendly' jobs appeal to many kinds of workers, not just older adults; and that labor market frictions shape who benefits from age-friendly jobs."

As governments grapple with rising life expectancies and shrinking traditional working-age populations, ensuring that older adults can continue working safely and with dignity is key to sustaining economic growth and social stability. According to the study, South Korea has made impressive strides in keeping older people in the workforce, but the next challenge is ensuring work itself evolves to meet their needs.

Stanford University's Walter H. Shorenstein Asia-Pacific Research Center (APARC) proudly announces the launch of the Taiwan Program, which will serve as an interdisciplinary research and education hub on contemporary Taiwan. The program will investigate Taiwan’s strides as a modernization exemplar and the challenges its economy and society face in seeking to drive dynamism and growth in an era marked by shifting global relations. On May 2, 2024, APARC will host the program’s inaugural conference, Innovate Taiwan: Shaping the Future of a Postindustrial Society. Registration for the conference is now open.

Mirroring the dilemmas of other postindustrial societies, Taiwan today finds itself pressed by multiple imperatives. These include the need to generate novel economic competitiveness models amid rapid technological advancement and declining multilateral cooperation, address changing demographic realities, foster cultural diversity and tolerance, fulfill the action pathway to achieve net-zero emissions, and create the institutional and policy conditions to enable these adaptations. The Taiwan Program will explore how Taiwan can effectively address these challenges and seize the opportunities they afford for it to remain at the forefront of vibrancy and progress in the 21st century. 

Housed within APARC, part of the Freeman Spogli Institute for International Studies (FSI), the Taiwan Program will pursue a mission encompassing research endeavors, education and learning initiatives, and exchange opportunities. By investing in these three core areas, the program will produce interdisciplinary, policy-relevant research to understand and address Taiwan’s challenges of economic, social, technological, environmental, and institutional adaptation in the coming decades; prepare the next generation of students to become experts on Taiwan; and facilitate meaningful interactions between Stanford faculty, researchers, and students with their Taiwanese counterparts and with policy experts, industry leaders, and civil society stakeholders in Taiwan. In all these areas, the program will leverage APARC’s expertise and networks and build upon the center’s strong track record of academic research and policy engagement with East Asia. This includes leveraging the proven model and rich experience of APARC’s esteemed programs on contemporary China, Japan, and Korea.

"The Taiwan Program underscores our commitment to deepening understanding of and engagement with Taiwan,” said Gi-Wook Shin, the William J. Perry Professor of Contemporary Korea and director of APARC. “We aim to foster research-practice partnerships between the United States and Taiwan while contributing to Taiwan's long-term development," added Shin, who is also a professor of sociology, a senior fellow at FSI, and director of the Korea Program at APARC.

The program will be led by a distinguished scholar of contemporary Taiwan to be recruited by the university in an international search. APARC will soon announce its inaugural postdoctoral fellow on contemporary Taiwan, who will help organize the program’s activities in the next academic year. The new program is made possible thanks to tremendous support from several Stanford donors who care deeply about Taiwan’s role on the global stage and U.S.-Taiwan relations. 

"We are profoundly grateful to our supporters for their partnership and commitment to advancing understanding of Taiwan and the U.S.-Taiwan relationship in this pivotal Asia-Pacific region," noted Shin. “This new investment will help us establish a world-leading program on Taiwan at Stanford.”

To inaugurate the new program, APARC will host the conference "Innovate Taiwan: Shaping the Future of a Postindustrial Society." Held on May 2 at the Bechtel Conference Center in Encina Hall, this full-day event will convene esteemed academic and industry leaders to engage in panel discussions covering topics such as migration, culture, and societal trends; health policy and biotechnology; economic growth and innovation; and the dynamics of domestic and international Taiwanese industries. Visit the conference webpage to learn more and register to attend in person.

What's next for Korean democracy? How can Korea advance to the next stage of its development? APARC and Korea Program Director Gi-Wook Shin addresses these and other questions in his new book, The Adventure of Democracy: How to Cross the Era of Conflict and Division. According to Shin, a senior fellow at the Freeman Spogli Institute for International Studies, a professor of Sociology, and the William J. Perry Professor of Contemporary Korea, democracy develops through steady adventures. He considers its evolution in Korea, reflects on Korean politics of division and confrontation and their sources, and seeks alternatives.

The book, which has been released in Korea, is a compilation of Shin's recent series of essays, “Shin's Reflections on Korea,” published by Sindonga (New East Asia), Korea’s oldest monthly magazine. In these essays, Shin explores “Next Korea”— Korea’s vision for the future — and outlines a roadmap for achieving it across the realms of politics, economics, society, culture, and foreign policy. He offers an outside perspective that allows him to see the “forest” of Korea’s path toward the future.

By any measure, Korea has made remarkable achievements in a short time, Shin writes. “It has overcome war, division, and authoritarian rule to become a country with the 10th largest economy in the world in only seven decades. Its soft power is sweeping across the globe, and Korea has world-class talent in every field. This is truly a miracle, and Koreans have every reason to be proud.”

Korea, however, stands at a critical crossroads, according to Shin. Populism and polarization pose challenges to the country’s democracy at a time of leadership crisis, Korean society is remarkably divided, and its aging population presents formidable obstacles to economic growth. Inter-Korean relations are in dire straits, and Seoul confronts a delicate regional balancing act amid intensified Sino-U.S. tensions. Will it settle for the status quo or progress to become a global leader?

Selected coverage of Shin's book in Korean media:

The Korea Times
The Korea Daily
Yonhap News
Busan Ilbo
Chosun
TV Chosun News
Donga Ilbo
Hankook Ilbo
Kookmin Ilbo
Kyosu Shinmun
Kyunghyang Shinmun
Metro Seoul
Munhwa Ilbo
SBS News
Shindonga Magazine (interview) 
Shindona Magazine (book review)

APARC and Korea Program Director Gi-Wook Shin recently joined the Japan Economic Foundation (JEF) to discuss his research project "Talent Flows, Brain Hubs, and Socioeconomic Development in Asia." The conversation was published in the May/June 2023 issue of the Japan SPOTLIGHT, the online journal of JEF.

📥 Download a PDF version of this interview.

JS: How do you see the different situations vis-à-vis demography among Asia-Pacific nations? Some countries like Japan are suffering from depopulation while some are seeing an increase in population. How do you assess the political and economic implications?

Shin: As you mentioned, Japan and South Korea are going through very serious demographic crises with low birth rates, aging populations, and declines in the working-age population. On the other hand, India and many countries in Southeast Asia have very young populations, and we might expect an increase in talent mobility within the Asia-Pacific region. In the past, a lot of Chinese, Indian, and Korean students came to the United States and Europe. But now more people are going to Japan and South Korea. Their level of education has improved; the quality of universities in advanced Asian countries is quite good. We should think about the policy implications of the increase in regional talent mobility in the Asia-Pacific region.

JS: For example, India and Japan are referred to as complementary because India has lots of young people and Japan does not. Would you say that if Japan expanded opportunities for immigrants, it would make the relationship between Japan and India more complementary? Of course, India-Japan relations can be discussed in the context of skilled immigrants but there is still some disagreement on the issue of immigration of unskilled immigrants.

Shin: In the past, Japan and South Korea accepted largely unskilled labor from China and Southeast Asia. This unskilled migration will continue, but at the same time, Japan and South Korea need to accept more skilled migrants. India can be a good source. It is encouraging to see more foreign students who come to Japan, for example, for college and then stay to work. However, most foreigners leave after a few years of work. If you look at Australia, in contrast, many international students go there for college, stay, and eventually naturalize as Australian citizens. One may point out that Australia is very different from Japan or South Korea, which I partially agree with. However, until the 1970s, Australia was also promoting racial homogeneity. Under their “White Australia” policy, they were accepting only white Europeans, but couldn’t sustain the economy with the low population growth. They had to open up, promoting multiculturalism. This has led to an increase in immigrants from Asia, such as from China and India. Going back to your question, Japan and India can be complementary to each other: one needs talent, the other has a strong supply of IT workers.

JS: As you have just explained, the economic implications of this depopulation could cause us a shrinking economy. We should perhaps encourage the flow of talent to supplement the stagnant economy with immigrants – but what do you think about the political implications of this declining population in terms of security concerns?

Shin: Let me give you an example from South Korea. This is a big issue for South Korea because it maintains a large military. On the one hand, there is no way to maintain the military’s current size or level due to a shrinking population but on the other hand, I don’t think you can bring immigrants into the military. It’s not like bringing immigrants into a company. Another political implication is the change in the voting landscape as the proportion of older people or senior citizens is really increasing. They tend to be more conservative, in favor of conservative parties. This may not be an issue for Japan because the Liberal Democratic Party (LDP) gets a lot of support from senior citizens anyway, but in South Korea and other countries where there is a regular change of power, this has potentially huge political implications.

JS: Looking at the possible merits of depopulation, some economists would say that of course depopulation has demerits, but it may still have some merits because individual wealth may increase. What is your perspective on this notion?

Shin: Some jobs can be replaced by robots or AI, and then not only may we not need so many people, but there may be less competition for jobs. Still, I think for any country to maintain the scale of its economy you must maintain a certain level of population. It is not only about production but also consumption. If you have a declining population then consumption will decline in tandem, which will negatively impact the economy. Japan has a fairly large population and the market may be good enough to be self-sufficient for now. But should the population become half of what it is today, then it probably may not be able to sustain the current scale of the economy. While overall you don’t want too many people, South Korea and Japan should be concerned about their declining populations.

To continue reading, download the complete interview >

[Subscribe to our newsletters to get updates on our experts' latest research.]

Published in APARC’s in-house series, the book is the second volume resulting from APARC’s Stanford Asia-Pacific Research Innovation project. It collects the research findings of participants at the project’s third conference that was held in South Korea in June 2019.

James Liang, a research professor of economics at Peking University and a leading scholar of demographics and social studies, opened the event by situating the discussion about population structure in the context of the U.S.-China technology race. China is quickly catching up with the United States in the quality of its talent pool and the number of its labor resources. It will continue to outpace and surpass the United States in talent and innovation power in the next 10-20 years, Liang says.

China, however, is on a demographic cliff, facing severe population aging and low fertility rates. Its population of young workers aged 25-44 year-olds is projected to decline much faster and sooner than its overall population, leveling out against the labor and innovation gains the United States makes through the inflow of international talent into U.S. universities and entrepreneurial ventures. To sustain its long-term growth in labor quality and innovation, China will need higher birth rates and additional talent gains through migration, argues Liang.

James Feyrer’s book chapter examines the macroeconomic relationship between workforce demographics and aggregate productivity in Asia. Feyrer confirms that the high-income Asian nations like Japan and Korea, and even some middle-income countries of the region, will no longer enjoy a “demographic dividend” boosting aggregate productivity. However, he finds that the negative consequences of shifting to an older population structure may be less severe than previously projected, and even weakening with time. Feyrer believes this may be a result of improved food security and better overall health experienced by old cohorts in childhood, reinforcing the long-reaching impacts of healthcare on societal well-being.

Joon-Shik Park focused on the specific challenges facing Korean society, where birth rates have dropped severely. These historic declines continue to contribute to rising social and political unevenness across Korean society today. Initially seen most visibly in rural areas and smaller villages, Park’s now sees this unevenness affecting the dynamics of medium-sized towns and more urban areas as well. Korea and other aging societies must find viable solutions to address these issues if they are to prevent demographic divides from hobbling development and innovation, Park says.

Closing the book launch event, APARC Research scholar Kenji Kushida offers perspectives from rapidly aging Japan. where the challenges of shrinking and aging populations, rural-to-urban population distribution, and labor shortages spur advances in technology and innovation. Kushida documents this trend across multiple sectors.

He shows that drone technology has increased the productivity of short-staffed surveying firms, while AI-assisted industrial machines allow a broader range of laborers to work in manufacturing. Even in traditionally human-dominated environments like nursing homes, staff increasingly use robots to help improve the physical and mental well-being of elderly patients. Rather than strictly retarding growth, Kushida makes the case that demographic challenges serve as a catalyst for the development and implementation of new technologies.

As the research collected in Demographics and Innovation in the Asia-Pacific demonstrates, the challenges facing aging Asian societies are complex, but there is reason to look to the future with optimism. As the editors of the volume state in their introduction to the book, “Few concepts are as critical for sustained improvement in living standards as innovation.” New technologies and solutions will be foundational to addressing the challenges of the new demographic frontiers many societies are now approaching.