China’s cross-provincial settlement policy and the mental health of the elderly and adult population

This paper examines the mental health effects of China’s 2017 cross-provincial hospitalization settlement policy, which improved the portability of public health insurance for internal migrants. Using five waves (2011–2020) of nationally representative panel data from the China Health and Retirement Longitudinal Study (CHARLS), we estimate its causal impact on depressive symptoms among middle-aged and older adults whose insurance was registered outside their place of residence. A province-level policy intensity index, based on hospital participation rates, is combined with a triple-difference strategy exploiting variation across time, regions, and hukou-linked insurance access. The policy reduced CESD depression scores among non-local hukou holders by about 1.3 points, with stronger effects for low-income, rural, and female subgroups. Event study results support the parallel trends assumption, and placebo tests confirm robustness. We introduce the concept of hukou lock—a form of welfare-induced geographic immobility where access to inpatient reimbursement is tied to one’s hukou rather than residence. This lock-in mechanism, analogous to “job lock” in employer-based systems, distorts residential choices, constrains healthcare access, and heightens care-related anxiety. The 2017 reform’s dismantling of hukou lock provides a quasi-natural experiment to assess its psychosocial consequences. Our findings highlight the mental health benefits of portable and inclusive insurance systems, offering policy lessons for aging societies with decentralized welfare structures.