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Does Publicly Provided Home Care Substitute for Family Care? Experimental Evidence with Endogenous Living Arrangements

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  • Liliana E. Pezzin
  • Peter Kemper
  • James Reschovsky
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    Abstract

    This paper analyzes the extent to which publicly provided formal (paid) home care substitutes for unpaid care provided informally by family and friends. Unlike most previous research, we recognize that the choice among alternative combinations of formal and informal care depends on the type of living arrangement chosen, and that these living arrangement choices in turn are influenced by the public provision of formal home care. Using data from a social experiment, we find that a generous public home care program significantly increases the probability that unmarried persons will live independently and reduces the probability of living in shared households or in nursing or personal care homes. However, any substitution effects-either direct effects on provision of informal care given living arrangement or indirect effects due to living arrangement changes-appear to be small.

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    Bibliographic Info

    Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

    Volume (Year): 31 (1996)
    Issue (Month): 3 ()
    Pages: 650-676

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    Handle: RePEc:uwp:jhriss:v:31:y:1996:i:3:p:650-676

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    Web page: http://jhr.uwpress.org/

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    Cited by:
    1. de Meijer, Claudine & Koopmanschap, Marc & d' Uva, Teresa Bago & van Doorslaer, Eddy, 2011. "Determinants of long-term care spending: Age, time to death or disability?," Journal of Health Economics, Elsevier, vol. 30(2), pages 425-438, March.
    2. Cox, Donald & Stark, Oded, 2004. "On the Demand for Grandchildren: Tied Transfers and the Demonstration Effect," Economics Series 158, Institute for Advanced Studies.
    3. Michelle Sovinsky & Steven Stern, 2013. "Dynamic modelling of long-term care decisions," ECON - Working Papers 113, Department of Economics - University of Zurich.
    4. Goltz, Andreas & Arnault, Louis, 2013. "How would informal caregivers react to an increase in formal home-care use by their elderly dependent relatives in France?," Economics Papers from University Paris Dauphine 123456789/11722, Paris Dauphine University.
    5. Darius Lakdawalla & Tomas Philipson, 1999. "Aging and the Growth of Long-Term Care," NBER Working Papers 6980, National Bureau of Economic Research, Inc.
    6. Eric Bonsang, 2008. "Does Informal Care from Children to their Elderly Parents Substitute for Formal Care in Europe?," CREPP Working Papers 0801, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
    7. Viitanen, Tarja, 2007. "Informal and Formal Care in Europe," IZA Discussion Papers 2648, Institute for the Study of Labor (IZA).
    8. Noguchi, Haruko & Shimizutani, Satoshi, 2011. "The determinants of exit from institutions and the price elasticity of institutional care: Evidence from Japanese micro-level data," Journal of the Japanese and International Economies, Elsevier, vol. 25(2), pages 131-142, June.
    9. Liliana Pezzin & Barbara Schone, 1999. "Parental marital disruption and intergenerational transfers: An analysis of lone elderly parents and their children," Demography, Springer, vol. 36(3), pages 287-297, August.
    10. Alain Paraponaris & Bérengère Davin & Pierre Verger, 2012. "Formal and informal care for disabled elderly living in the community: an appraisal of French care composition and costs," The European Journal of Health Economics, Springer, vol. 13(3), pages 327-336, June.
    11. Gopi Shah Goda & John B. Shoven & Sita Nataraj Slavov, 2011. "Does Widowhood Explain Gender Differences in Out-of-Pocket Medical Spending Among the Elderly?," NBER Working Papers 17440, National Bureau of Economic Research, Inc.
    12. Gopi Shah Goda & Ezra Golberstein & David C. Grabowski, 2010. "Income and the Utilization of Long-Term Care Services: Evidence from the Social Security Benefit Notch," NBER Working Papers 16076, National Bureau of Economic Research, Inc.
    13. Engelhardt, Gary V. & Greenhalgh-Stanley, Nadia, 2010. "Home health care and the housing and living arrangements of the elderly," Journal of Urban Economics, Elsevier, vol. 67(2), pages 226-238, March.
    14. Orsini, Chiara, 2010. "Changing the way the elderly live: Evidence from the home health care market in the United States," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 142-152, February.
    15. Ugolini Cristina & Lippi Bruni Matteo, 2006. "Assistenza a domicilio e assistenza residenziale: politiche di intervento e analisi empirica," Rivista italiana degli economisti, Società editrice il Mulino, issue 2, pages 241-268.
    16. M. Lippi Bruni & C. Ugolini, 2013. "Delegating home care for the elderly to external caregivers? An empirical study on Italian data," Working Papers wp905, Dipartimento Scienze Economiche, Universita' di Bologna.
    17. Goltz, Andreas & Arnault, Louis, 2014. "Can formal home care reduce the burden of informal care for elderly dependents? Evidence from France," Economics Papers from University Paris Dauphine 123456789/13164, Paris Dauphine University.
    18. 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.

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