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Thinking of incentivizing care? The effect of demand subsidies on informal caregiving and intergenerational transfers

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We show that demand side cash subsidies to care recipients alter both caregiving and intergenerational transfer decisions. We exploit a quasi-natural experiment referring to the inception of a universal caregiving allowance (in 2007 and its reduction in 2012). We find a caregiving subsidy (of a magnitude of 530€ in 2011) to increase the probability of informal caregiving by 32% (the intensity of care in 13.5 days/year). Similarly, we find that downstream (upstream) intergenerational transfers increased (decreased) in a magnitude of 29% (15%). The effects concentrate among middle and lower income households, and were attenuated by the reduction of the subsidy.

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File URL: https://econ-papers.upf.edu/papers/1537.pdf
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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1537.

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Date of creation: Sep 2016
Date of revision: May 2017
Handle: RePEc:upf:upfgen:1537
Contact details of provider: Web page: http://www.econ.upf.edu/

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