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Do public caregiving subsidies and supports affect the provision of care and transfers?

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  • Costa-Font, Joan
  • Jimenez-Martin, Sergi
  • Vilaplana-Prieto, Cristina

Abstract

We study whether caregiving and intergenerational transfer decisions are sensitive to changes in economic incentives following the inception of a new unconditional and universal system of allowances and supports, after the introduction of the 2006 Promotion of Personal Autonomy and Care for Dependent Persons Act (SAAD in Spanish), and the ensuing effects of its austerity cuts after 2012. We find that whilst the introduction of a caregiving allowance (of a maximum value of €530 in 2011) increased the supply of informal caregiving by 20-22 percentual points (pp), the inception of a companion system of publicly subsidised homecare supports did not modify the supply of care. Consistent with an exchange motive for intergenerational transfers, we estimate an average 17 pp (8.2-8.7pp) increase (decrease) in downstream (upstream) transfers among those receiving caregiving allowances. Our estimates resulting from the reduction in the allowances and supports after the austerity cuts in 2012 are consistent with our main estimates, and suggest stronguer effects among lower-income families.

Suggested Citation

  • Costa-Font, Joan & Jimenez-Martin, Sergi & Vilaplana-Prieto, Cristina, 2022. "Do public caregiving subsidies and supports affect the provision of care and transfers?," LSE Research Online Documents on Economics 115185, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:115185
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    Cited by:

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    2. Xiaoyu Wang & Wenze Tian & Guohui Zhan & Yiming He, 2025. "The Impact of Long-Term Care Insurance on Intergenerational Interaction Behavior Change in China," Journal of Family and Economic Issues, Springer, vol. 46(2), pages 613-631, June.
    3. Joan Costa‐Font & Cristina Vilaplana‐Prieto, 2025. "The Hidden Value of Adult Informal Care in Europe," Health Economics, John Wiley & Sons, Ltd., vol. 34(4), pages 791-812, April.
    4. Renner, Anna-Theresa & Shaikh, Mujaheed & Spitzer, Sonja, 2023. "The long-term impact of maternal leave duration on smoking behavior," MPRA Paper 118675, University Library of Munich, Germany.
    5. Rapp, Thomas & Jena, Anupam B. & Costa-Font, Joan & Grabowski, David C., 2023. "Caregiving across generations: Do older adults with more grandchildren get another bite at the “sandwich” generation?," Social Science & Medicine, Elsevier, vol. 334(C).
    6. Miao Guo & Yang Li & Minghao Wu & Terence C. Cheng, 2024. "Services and Cash: How Long-term Care Insurance Benefit Design Affects Household Behavior in China," Papers 2024-13, Centre for Health Economics, Monash University.
    7. Joan Costa-Font & Sergi Jiménez & Cristina Vilaplana Prieto & Analía Viola, 2022. "Long-term Care in Spain," Studies on the Spanish Economy eee2022-23, FEDEA.
    8. Renner, Anna-Theresa & Shaikh, Mujaheed & Spitzer, Sonja, 2025. "Absence from work and lifetime smoking behavior: Evidence from European maternal leave policies," Journal of Health Economics, Elsevier, vol. 102(C).
    9. Joan Costa-Font, 2023. "How to support adult caregivers?," World of Labour, LISER, pages 510-510, June.

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    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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