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A panel multinomial logit analysis of elderly living arrangements: Evidence from aging in Manitoba longitudinal data, Canada

Listed author(s):
  • Sarma, Sisira
  • Simpson, Wayne

Utilizing a unique longitudinal survey linked with home care use data, this paper analyzes the determinants of elderly living arrangements in Manitoba, Canada using a random effects multinomial logit model that accounts for unobserved individual heterogeneity. Because current home ownership is potentially endogenous in a living arrangements choice model, we use prior home ownership as an instrument. We also use prior home care use as an instrument for home care and use a random coefficient framework to account for unobserved health status. After controlling for relevant socio-demographic factors and accounting for unobserved individual heterogeneity, we find that home care and home ownership reduce the probability of living in a nursing home. Consistent with previous studies, we find that age is a strong predictor of nursing home entry. We also find that married people, those who have lived longer in the same community, and those who are healthy are more likely to live independently and less likely to be institutionalized or to cohabit with individuals other than their spouse.

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

Volume (Year): 65 (2007)
Issue (Month): 12 (December)
Pages: 2539-2552

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Handle: RePEc:eee:socmed:v:65:y:2007:i:12:p:2539-2552
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  1. Axel Borsch-Supan & Vassilis Hajivassiliou & Laurence J. Kotlikoff, 1992. "Health, Children, and Elderly Living Arrangements: A Multiperiod-Multinomial Probit Model with Unobserved Heterogeneity and Autocorrelated Errors," NBER Chapters,in: Topics in the Economics of Aging, pages 79-108 National Bureau of Economic Research, Inc.
  2. Steven Stern, 1995. "Estimating Family Long-Term Care Decisions in the Presence of Endogenous Child Characteristics," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 551-580.
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  4. Alvin E. Headen Jr., 1993. "Economic Disability and Health Determinants of the Hazard of Nursing Home Entry," Journal of Human Resources, University of Wisconsin Press, vol. 28(1), pages 80-110.
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  7. William Greene, 2003. "A Interpreting Estimated Parameters and Measuring Individual Heterogeneity in Random Coefficient Models," Working Papers 03-19, New York University, Leonard N. Stern School of Business, Department of Economics.
  8. Laurence J. Kotlikoff & John N. Morris, 1990. "Why Don't the Elderly Live with Their Children? A New Look," NBER Chapters,in: Issues in the Economics of Aging, pages 149-172 National Bureau of Economic Research, Inc.
  9. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555.
  10. 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 428-440, August.
  11. Ettner, Susan L, 1994. "The Effect of the Medicaid Home Care Benefit on Long-Term Care Choices of the Elderly," Economic Inquiry, Western Economic Association International, vol. 32(1), pages 103-127, January.
  12. Darius N. Lakdawalla & Robert Schoeni, 2003. "Is nursing home demand affected by the decline in age difference between spouses?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 8(10), pages 279-304, May.
  13. Mark W. Rosenberg, 2000. "The Effects of Population Ageing on the Canadian Health Care System," Social and Economic Dimensions of an Aging Population Research Papers 14, McMaster University.
  14. Alan M. Garber & Thomas E. MaCurdy, 1990. "Predicting Nursing Home Utilization among the High-Risk Elderly," NBER Chapters,in: Issues in the Economics of Aging, pages 173-204 National Bureau of Economic Research, Inc.
  15. 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.
  16. David M. Cutler & Louise Sheiner, 1994. "Policy Options for Long-Term Care," NBER Chapters,in: Studies in the Economics of Aging, pages 395-442 National Bureau of Economic Research, Inc.
  17. Freedman, V.A., 1996. "Family Structure and the Risk of Nursing Home Admission," Papers 96-10, RAND - Reprint Series.
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