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The Financial Support for Long-Term Elderly Care and Household Savings Behaviour

Author

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  • Ohinata, Asako

    (University of Leicester)

  • Picchio, Matteo

    (Marche Polytechnic University)

Abstract

We analyse how the financial support for long-term elderly care affects the level of household savings. Using a difference-in-differences estimator, we investigate the 2002 Scottish reform, which introduced free formal personal care for all the elderly aged 65 and above residing in Scotland. Our semiparametric estimation technique allows the policy effects to be flexibly estimated across age groups. We find that the Scottish policy reduced the average household saving by about £7,200. Moreover, the estimated effects are heterogeneous across age groups of the head of household: these effects are particularly strong among those aged between 40 and 60. The largest effect is observed at age 49 with the reduction in the average household saving by £12,764.

Suggested Citation

  • Ohinata, Asako & Picchio, Matteo, 2015. "The Financial Support for Long-Term Elderly Care and Household Savings Behaviour," IZA Discussion Papers 9237, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9237
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    Cited by:

    1. Bram De Rock & Mariia Kovaleva & Tom Potoms, 2023. "A Spouse and a House are all we need? Housing Demand, Labor Supply and Divorce over the Lifecycle," Working Papers ECARES 2023-18, ULB -- Universite Libre de Bruxelles.
    2. Hollingsworth, Bruce & Ohinata, Asako & Picchio, Matteo & Walker, Ian, 2017. "Labour supply and informal care supply: The impacts of financial support for long-term elderly care," GLO Discussion Paper Series 118, Global Labor Organization (GLO).
    3. 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.
    4. Hollingsworth, Bruce & Ohinata, Asako & Picchio, Matteo & Walker, Ian, 2022. "Does It Matter Who Cares for You? The Effect of Substituting Informal with Formal Personal Care on the Care Recipients' Health," IZA Discussion Papers 15457, Institute of Labor Economics (IZA).
    5. Khadijah Alavi & Rosnah Sutan & Suzana Shahar & Mohd Rizal Abdul Manaf & Mohd Hasni Jaafar & Khairul Nizam Abdul Maulud & Zaini Embong & Kamarul Baraini Keliwon & Ruzian Markom, 2022. "Connecting the Dots between Social Care and Healthcare for the Sustainability Development of Older Adult in Asia: A Scoping Review," Sustainability, MDPI, vol. 14(5), pages 1-17, February.

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    More about this item

    Keywords

    wealth; saving; means tested financial support; ageing; long-term elderly care; difference-in-differences;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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