1. Introduction
The world is currently undergoing notable demographic shifts, characterized by the rapid acceleration of population aging in high- and upper-middle-income countries [
1]. The decline in physical functions is an inevitable consequence associated with the aging process. As this process intensifies, the proportion of the elderly facing health issues will markedly increase, leading to a significant societal burden. As a result of this, both economic development and social stability may be impacted [
2]. The physical health of the elderly has emerged as a prominent global concern. As the largest developing country worldwide, China is currently grappling with the pressing challenge of population aging, which imposes a substantial burden on elderly support systems. According to a bulletin issued by China’s National Bureau of Statistics, the elderly population in China aged 60 and above reached 280 million by the end of 2022, accounting for 19.8% of the country’s total population (Statistical Bulletin of the People’s Republic of China on National Economic and Social Development for 2022,
https://www.stats.gov.cn/sj/zxfb/202302/t20230228_1919011.html (accessed on 25 December 2023)). This statistic indicates that China is on the verge of entering a moderately aging society. Gao et al. (2021) report that the number of elderly individuals with disabilities or semi-disabilities will approach 100 million by this mid-century [
2]. The demand and expenditure on healthcare services for the elderly will undoubtedly witness a substantial increase, thereby exerting unparalleled pressure on the healthcare supply [
3]. Therefore, enhancing the physical health of the elderly is an urgent and critical issue that requires further attention.
With the advancement of information technology and the widespread adoption of smart devices, digital technology is playing an increasingly vital role in promoting the physical health of aging populations in China. According to a report conducted by the Chinese Academy of Social Sciences, the amount of WeChat payments made by the elderly has exhibited continuous growth since 2017, increasing by 5227 percent in the second quarter of 2021 compared with the first quarter of 2017 (National Institute of Social Development, CASS,
http://nisd.cssn.cn/ (accessed on 25 December 2023)). As an important part of digital technology, digital finance (DF) offers convenient financial services that enhance the diversity of household investments [
4] and boost the likelihood and proportion of households allocating funds to risky financial assets [
5]. This can potentially alleviate financing constraints faced by the elderly, increase their income, and improve their overall quality of life. Furthermore, DF eliminates time and space constraints [
6] and broadens the scope of intergenerational support. Adult children can use Internet platforms to purchase digital health insurance for their parents and make appointments online, thereby facilitating easier access to medical services for the elderly. In light of this, it is becoming extremely significant to investigate the effects of DF on the physical health of the elderly.
Currently, there is extensive academic discourse surrounding the influence of DF on the residents. This discussion primarily focuses on residents’ income, consumption, and employment [
7,
8,
9]. Firstly, regarding residents’ income, the existing literature has reached a consensus that the growth of DF has substantially enhanced residents’ income [
10]. Specifically, DF facilitates income growth by encouraging productive investment [
11], self-employment [
7], and financial management [
12]. Secondly, some studies have demonstrated that DF promotes higher levels of consumption among residents by increasing income [
13], popularizing mobile payment methods [
13], providing online credit [
8], and offering Internet financial products [
8]. Additionally, relevant studies have indicated that DF incentivizes individuals to modify their consumption habits, adopt green consumption practices [
14], and upgrade household consumption [
15]. In terms of consumption types, DF has primarily contributed to the rise in household recurrent expenses [
16], including food, healthcare, education, and clothing, whereas the impact on non-recurrent expenditures has been less significant [
8]. Finally, some studies have indicated that DF has an overall positive effect on employment [
9]. However, the impact of DF varies across industries. Specifically, DF has a greater impact on increasing labor demand in manufacturing, technology-intensive, small-city, and unlisted firms by addressing their financing constraints and operating costs [
17]. Furthermore, the implementation of DF has resulted in a substantial decrease in employment within the financial industry, resulting in the emergence of skilled unemployment [
18]. Nevertheless, the existing research has somewhat overlooked the circumstances of older people as a collective in the context of the advancement and dissemination of DF. There is a paucity of the literature examining the impact of DF on the lives of older people, particularly in relation to their health. Furthermore, when examining the influence of DF on residents’ income, consumption, and employment, existing studies tend to adopt a macro-level analysis, while comparatively few studies investigate micro-mechanisms. Moreover, there is a paucity of research investigating the micro-mechanisms underlying the impact of DF on the health of the elderly. Nevertheless, with the growing prevalence of DF, it is imperative to examine its influence on the elderly.
The present study utilizes data from the China Health and Retirement Longitudinal Study (CHARLS) conducted in 2013, 2015, and 2018, as well as city-level macrodata, to investigate the impact of DF on the physical health of the elderly. The conclusions of this paper are as follows. (1) The findings suggest a positive association between the development of DF and the physical health of the elderly. These findings remain robust even after conducting various robustness tests, such as replacing variables, adding potentially omitted variables, adjusting samples, and employing the instrumental variable (IV) method. (2) A further analysis reveals that the usage depth and digitization degree of DF have a notably positive impact on the physical health of the elderly, whereas the coverage breadth of DF has no significant impact. Furthermore, the beneficial impact of DF on the physical health of the elderly is mainly observed among elderly with a higher level of education, stronger intergenerational links, and those located in central cities. (3) The underlying mechanisms indicate that DF improves the physical health of the elderly primarily by increasing household disposable income, alleviating liquidity constraints, and enhancing medical service utilization.
The study makes several significant contributions. Firstly, it enriches the existing research on the effects of DF. The existing literature has primarily focused on residents’ income, consumption, and employment; this study specifically examines the impact of DF on the physical health of the elderly, thus complementing the related literature on this topic. Secondly, this study complements the research on the factors influencing the physical health of the elderly. Although limited literature has explored the impact of DF on individuals’ health from a certain aspect, such as mobile payment, no comprehensive research has been found to examine how DF affects the physical health of the elderly. Lastly, this study investigates the underlying mechanisms by considering household disposable incomes, liquidity constraints, and medical service utilization. By doing so, this study not only expands the understanding of how to improve the physical health of the elderly but also offers valuable insights for China to effectively promote the policy of active population aging.
The remainder of this study is organized as follows: The second part presents the theoretical analysis and research hypotheses. The third part outlines the data, variables, and model. The fourth part discusses the empirical results. The fifth part delves into the underlying mechanisms. Finally, the study concludes with a summary and policy implications.
6. Conclusions
In recent years, the surge in the digital economy has become a key driver of global economic development. DF, in particular, has infiltrated various aspects of people’s livelihoods, serving as a noteworthy manifestation and application of the digital economy. DF offers a reliable avenue for improving the financial well-being of the elderly and their families, thereby boosting their physical health outcomes. In light of this, this study aims to investigate the impact of DF on the physical health of the elderly and explore the underlying mechanisms. To achieve this, this study utilizes CHARLS data for the years 2013, 2015, and 2018, as well as city-level macrodata. The findings of this study reveal that the advancement of DF has a substantial positive effect on the physical health of the elderly. These results remain robust even after various tests, including substituting variables, considering potential omitted variables, adjusting samples, and employing the IV method. Furthermore, the heterogeneity analysis demonstrates that the usage depth and digitization degree of DF significantly improve the physical health of the elderly, whereas its coverage breadth does not have a significant impact. In addition, the beneficial effects of DF on the physical health of the elderly are mainly observed among those with higher levels of education, stronger intergenerational links, and those residing in central cities. Finally, our analysis suggests that the ameliorative effect of DF on the physical health of the elderly primarily operates through increasing household disposable income, alleviating liquidity constraints, and enhancing the utilization of medical services. In light of the accelerated development of DF and the growing reliance of the population on it, this paper posits that the impact of DF on the physical health of older people will be even more profound. Furthermore, COVID-19 has accelerated the penetration of DF into the daily lives of the elderly, and the impact effects examined in this paper will be further significant. Therefore, with the fast evolution of digital technology, the impact of DF on the physical health of the elderly deserves more attention.
7. Policy Implications
Based on the aforementioned findings, this study presents the following policy prescriptions, which may be extended to other countries: Firstly, increase the depth of participation of the elderly in DF. Government policies in each country should encourage the expansion of digital financial services, such as mobile payments, online credit, and Internet insurance, and lower the threshold for the elderly to use them by incorporating appropriate aging concepts into the design of financial service products, such as streamlining operational processes. Furthermore, it is imperative for the government and social organizations to implement regular and comprehensive digital technology training programs for the elderly. These programs should cover a wide range of skills including the use of smartphones, Internet browsing, emailing, and other digital skills. It is essential that these programs be made readily available in community centers, libraries, and activity centers specifically designed for the elderly. Such initiatives would undoubtedly enhance the ability of the elderly population to effectively utilize digital technology.
Secondly, countries and regions with underdeveloped DF should prioritize the design and implementation of robust digital infrastructure, in addition to fostering international exchange. Digital infrastructure is a precondition for DF development, so further improvements in digital infrastructure construction are necessary to promote DF development. Meanwhile, it is imperative to focus on regional coordinated development within countries, focusing on strengthening the popularization of 5G and gigabit Internet services in remote areas, so as to lay a solid foundation for the development of DF in underdeveloped areas. Concurrently, it is imperative to reinforce exchanges and collaborations with international cutting-edge technology to facilitate the introduction of international advanced technology and expertise and to enhance the technical proficiency of domestic DF.
Thirdly, it is critical to recognize the synergistic effect of DF development and geriatric education. Empirical analysis indicates that as education levels increase, the beneficial effect of DF on the physical health of the elderly becomes more significant. Therefore, it is imperative to enhance policy support for geriatric education and facilitate lifelong learning for the elderly. This will effectively address the issue of the digital divide and enable more elderly individuals to benefit from the development dividends offered by the digital economy.
Finally, the financial security of the elderly should be taken seriously by governments. Specifically, financial product supervision aimed at the elderly should be strengthened and educational financial lectures tailored to this demographic should be periodically conducted. This cohort has suboptimal financial literacy and a limited ability to prevent fraud, thereby necessitating procedural adjustments in the related legal system. It is also crucial to implore children to offer adequate support and care for their elderly relatives and assist them in utilizing DF services when necessary.