The impact of digital finance on elderly physical health: Evidence from China

Given an increasingly aging global population, physical health challenges faced by elderly individuals have become a critical societal issue. This study investigates the influence of digital finance on the physical health of seniors and its underlying mechanisms to explore an effective technology-facilitated pathway for enhancing well-being in later life.

Using data from the China Health and Retirement Longitudinal Study, the digital finance index developed, and a two-way fixed-effects model, this study assessed the role of digital finance in shaping the physical health of older adults.

We find that the development of digital finance has significantly promoted the physical health of older adults mainly by increasing income, promoting healthcare accessibility and social participation. The relaxation of liquidity constraints is not the main reason for this improvement. Heterogeneity analysis reveals that welfare improvement exhibits no noticeable differences based on their residence and education level or the region's traditional financial scale; these trends are more pronounced in the western region. In addition, innovative financial products such as digital insurance, mobile payments, and monetary funds facilitate the promotion of elderly physical health.

The study provides evidence of the practical value of digital finance in enhancing the physical health of the elderly. It also recommends the adoption of elderly-friendly designs and complementary social services through which digital financial tools can contribute more effectively to promoting efficient health outcomes.