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Informal and Formal Care in Europe

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  • Viitanen, Tarja

    ()
    (University of Otago)

Abstract

Government expenditure on formal residential care and home-help services for the elderly significantly reduces 45-59 year old women’s informal care-giving affecting both the extensive and the intensive margin. Allowing for country fixed-effects and country-specific trends and correcting for attrition, the estimates – based on the European Community Household Panel – imply that a 1000 Euro increase in the government expenditure on formal residential care and home-help services for the elderly decreases the probability of informal care-giving outside of the caregiver’s household by 6 percentage points. Formal care substitutes for informal care that is undertaken outside of the carer’s own household, but does not substitute for intergenerational household formation. A simulation exercise shows that an increase in government formal care expenditure is a cost-effective way of increasing the labour force participation rates.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2648.

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Length: 26 pages
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2648

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Keywords: informal care; formal care; ECHP; attrition bias;

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References

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  1. Florence Jaumotte, 2003. "Female Labour Force Participation: Past Trends and Main Determinants in OECD Countries," OECD Economics Department Working Papers 376, OECD Publishing.
  2. Siv Gustafsson, 2001. "Optimal age at motherhood. Theoretical and empirical considerations on postponement of maternity in Europe," Journal of Population Economics, Springer, vol. 14(2), pages 225-247.
  3. Hoerger, Thomas J & Picone, Gabriel A & Sloan, Frank A, 1996. "Public Subsidies, Private Provision of Care and Living Arrangements of the Elderly," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 428-40, August.
  4. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90.
  5. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1985. "The Strategic Bequest Motive," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1045-76, December.
  6. Tennille J. Checkovich & Steven Stern, 2002. "Shared Caregiving Responsibilities of Adult Siblings with Elderly Parents," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 441-478.
  7. Verbeek, Marno & Nijman, Theo, 1992. "Testing for Selectivity Bias in Panel Data Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 681-703, August.
  8. Steven Stern & Bridget Hiedemann, 1999. "Strategic Play Among Family Members When Making Long-Term Care Decisions," Virginia Economics Online Papers 321, University of Virginia, Department of Economics.
  9. J. Jenson & Stéphane Jacobzone, 2000. "Care Allowances for the Frail Elderly and Their Impact on Women Care-Givers," OECD Labour Market and Social Policy Occasional Papers 41, OECD Publishing.
  10. Liliana E. Pezzin & Barbara Steinberg Schone, 1999. "Intergenerational Household Formation, Female Labor Supply and Informal Caregiving: A Bargaining Approach," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 475-503.
  11. Liliana E. Pezzin & Peter Kemper & James Reschovsky, 1996. "Does Publicly Provided Home Care Substitute for Family Care? Experimental Evidence with Endogenous Living Arrangements," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 650-676.
  12. Nijman, T.E. & Verbeek, M.J.C.M., 1992. "Testing for selectivity in panel data models," Open Access publications from Tilburg University urn:nbn:nl:ui:12-153280, Tilburg University.
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Cited by:
  1. Emmanouil Mentzakis & Paul McNamee & Mandy Ryan, 2009. "Who cares and how much: exploring the determinants of co-residential informal care," Review of Economics of the Household, Springer, vol. 7(3), pages 283-303, September.
  2. Ciani, Emanuele, 2012. "Informal adult care and caregivers' employment in Europe," Labour Economics, Elsevier, vol. 19(2), pages 155-164.
  3. Arnaulty, Louis & Goltzy, Andreas, 2012. "A micro-econometric analysis of care for the dependent elderly living at home in France: Is there a crowding-out effect of informal caregivers when an elderly dependent receives professional home care," Economics Papers from University Paris Dauphine 123456789/10723, Paris Dauphine University.
  4. 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.
  5. Sergi Jiménez-Martín & Cristina Prieto, 2012. "The trade-off between formal and informal care in Spain," The European Journal of Health Economics, Springer, vol. 13(4), pages 461-490, August.
  6. Carmichael, F. & Charles, S. & Hulme, C., 2010. "Who will care? Employment participation and willingness to supply informal care," Journal of Health Economics, Elsevier, vol. 29(1), pages 182-190, January.
  7. Ruud ter Meulen & Katharine Wright, 2010. "The Role of Family Solidarity: Ethical and Social Issues," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 8(2), pages 13-17, 07.
  8. Sergi Jiménez-Martín & Cristina Vilaplana Prieto, 2013. "Do Spanish Informal Caregivers Come to the Rescue of Dependent People with Formal Care Unmet Needs?," Working Papers 693, Barcelona Graduate School of Economics.
  9. 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.
  10. Haizhen Mou & Stanley L. Winer, 2012. "Fiscal Incidence when both Individual Welfare and Family Structure Matter: The Case of Subsidization of Home-Care for the Elderly," CESifo Working Paper Series 3731, CESifo Group Munich.
  11. Cristiano Perugini & Ekaterina Selezneva, 2013. "Labour Market Institutions, Crisis and Gender Earnings Gap in Eastern Europe," Working Papers 328, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  12. Fontaine, Roméo, 2011. "Le soutien familial aux personnes âgées dépendantes : Analyses micro-économétriques des comportements individuels et familiaux de prise en charge," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/7370 edited by Gramain, Agnès & Wittwer, Jérôme, September.

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