Micro-econometric analysis of care for the dependent elderly in France : How do formal and informal care interact ?
AbstractThis paper focuses on the trade-off between formal care and informal care for disabled elderly people living in the community. We propose a simple microeconomic model which describes the simultaneous decision process between potential informal caregivers and disabled elderly person living at home. The model predicts a strict substitution between the two kinds of care. To test the substitution e ffect and assess its intensity, we estimate a recursive simultaneous equation model linked by a copula function, using data from the French\ Handicap Santé Ménages " survey (2008). In contrast with previous literature, the estimated model allows to simultaneously identify both potential causality directions. Thanks to the copula function, strong assumptions about a linear link between the two residuals of both equations do not have to be made. Our results con firm that informal and formal home care are globally substitutes. Nevertheless, the predicted increase of formal care following a reduction of one hour of informal care remains very small. Informal care supply is also weakly sensitive to variations of formal care hours: The substitution e ffect is high only for individuals receiving much more informal than formal care.
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Bibliographic InfoPaper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/9534.
Date of creation: Jun 2011
Date of revision:
Long-term Care; Copula Function; Simultaneous Equations Model; Formal Care; Informal Care;
Find related papers by JEL classification:
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
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