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The fiscal impact of informal caregiving to home care recipients in Canada: How the intensity of care influences costs and benefits to government

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  • Jacobs, Josephine C.
  • Lilly, Meredith B.
  • Ng, Carita
  • Coyte, Peter C.
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    Abstract

    The objective of this study was to estimate the annual costs and consequences of unpaid caregiving by Canadians from a government perspective. We estimated these costs both at the individual and population levels for caregivers aged 45 and older. We conducted a cost-benefit analysis where we considered the costs of unpaid caregiving to be potential losses in income tax revenues and changes in social assistance payments and the potential benefit of reduced paid care expenditures. Our costing methods were based on multivariate analyses using the 2007 General Social Survey, a cross-sectional survey of 23,404 individuals. We determined the differential probability of employment, wages, and hours worked by caregivers of varying intensity versus non-caregivers. We also used multivariate analysis to determine how receiving different intensities of unpaid care impacted both the probability of receiving paid care and the weekly hours of paid care received. At the lowest intensities of caregiving, there was a net benefit to government from caregiving, at both the individual and population levels. At the population level, the net benefit to government was estimated to be $4.4 billion for caregivers providing less than five hours of weekly care. At the highest intensity of caregiving, there was a net cost to government of $641 million. Our overall findings were robust to a number of changes applied in our sensitivity analysis. We found that the factor with the greatest impact on cost was the probability of labour force participation. As the biggest cost driver appears to be the higher likelihood of intense caregivers dropping out of the labour force, government policies that enable intense caregivers to balance caregiving with employment may help to mitigate these losses.

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    Bibliographic Info

    Article provided by Elsevier in its journal Social Science & Medicine.

    Volume (Year): 81 (2013)
    Issue (Month): C ()
    Pages: 102-109

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    Handle: RePEc:eee:socmed:v:81:y:2013:i:c:p:102-109

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    Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/315/description#description

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    Related research

    Keywords: Canada; Unpaid caregiving; Benefit; Cost; Public; Informal care; Employment; Home care;

    References

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    1. Charles, Kerwin Kofi & Sevak, Purvi, 2005. "Can family caregiving substitute for nursing home care?," Journal of Health Economics, Elsevier, vol. 24(6), pages 1174-1190, November.
    2. Bonsang, Eric, 2009. "Does informal care from children to their elderly parents substitute for formal care in Europe?," Journal of Health Economics, Elsevier, vol. 28(1), pages 143-154, January.
    3. Hassink, Wolter & van den Berg, Bernard, 2011. "Time-Bound Opportunity Costs of Informal Care: Consequences for Access to Professional Care, Caregiver Support, and Labour Supply Estimates," IZA Discussion Papers 5433, Institute for the Study of Labor (IZA).
    4. Earle, Alison & Heymann, Jody, 2011. "Protecting the health of employees caring for family members with special health care needs," Social Science & Medicine, Elsevier, vol. 73(1), pages 68-78, July.
    5. Heitmueller, Axel, 2004. "The Chicken or the Egg? Endogeneity in Labour Market Participation of Informal Carers in England," IZA Discussion Papers 1366, Institute for the Study of Labor (IZA).
    6. K. Bolin & B. Lindgren & P. Lundborg, 2008. "Informal and formal care among single-living elderly in Europe," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 393-409.
    7. Berecki-Gisolf, Janneke & Lucke, Jayne & Hockey, Richard & Dobson, Annette, 2008. "Transitions into informal caregiving and out of paid employment of women in their 50s," Social Science & Medicine, Elsevier, vol. 67(1), pages 122-127, July.
    8. Drinkwater, Stephen, 2011. "Informal Caring and Labour Market Outcomes Within England and Wales," IZA Discussion Papers 5877, Institute for the Study of Labor (IZA).
    9. Van Houtven, Courtney Harold & Norton, Edward C., 2004. "Informal care and health care use of older adults," Journal of Health Economics, Elsevier, vol. 23(6), pages 1159-1180, November.
    10. O'Reilly, Dermot & Connolly, Sheelah & Rosato, Michael & Patterson, Chris, 2008. "Is caring associated with an increased risk of mortality? A longitudinal study," Social Science & Medicine, Elsevier, vol. 67(8), pages 1282-1290, October.
    11. Lilly, Meredith B. & Laporte, Audrey & Coyte, Peter C., 2010. "Do they care too much to work? The influence of caregiving intensity on the labour force participation of unpaid caregivers in Canada," Journal of Health Economics, Elsevier, vol. 29(6), pages 895-903, December.
    12. Fiona Carmichael & Susan Charles, 2003. "Benefit payments, informal care and female labour supply," Applied Economics Letters, Taylor & Francis Journals, vol. 10(7), pages 411-415.
    13. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-94, July.
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