Abstract: By making use of the data from “An-yang-bang”platform in 2022 and China Health and Retirement Longitudinal Study in 2018, this paper estimates the impact of the improvement of the basic pension benefits of urban workers on the prices of elderly care services of private institutions. The findings show that an average increase of 1% in the basic pension benefits of urban workers would result in an increase of 0.48% and 0.36% in the minimum and maximum prices of the elderly care services of the private institutions, respectively. The increase of the pension benefits would increase the demand for institutional care services for the elderly in urban areas, which in turn increases the price of private institutional care services. In addition, the increase of the pension benefits will have a greater impact on the prices of private institutions that are larger, located in central urban areas, and operating for a shorter time. The reform of the elderly care service system can be promoted by establishing pricing guidelines for private elderly care institutions, integrating pension insurance benefits with elderly care service policies, and optimizing subsidy mechanisms for private elderly care institutions, so as to facilitate the sustainable development of these institutions.

Key words: pension insurance benefits, private elderly care institution, price of institutional elderly care services, institutional elderly care demand