Informal and Formal Care in Europe
AbstractGovernment 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 InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2648.
Length: 26 pages
Date of creation: Feb 2007
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Other versions of this item:
- J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-31 (All new papers)
- NEP-EEC-2007-03-31 (European Economics)
- NEP-HEA-2007-03-31 (Health Economics)
- NEP-SOC-2007-03-31 (Social Norms & Social Capital)
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