Firms that are more central invest more in equilibrium. Central firms are exposed to larger idiosyncratic shocks that propagate in the production network. Their incentive to engage in precautionary saving is larger, leading to larger investment. In the data, I find support for this prediction,...

Using a nationally representative data in China, this study applies a difference-in-difference method to estimate the effect of long-term care insurance (LTCI) on spousal labor supply. First, we find LTCI increases the probability of spousal labor participation by 3.4 percentage points and...