The economics of informal care of the elderly

This paper is concerned with the costing of informal care which is the unpaid help provided, in this instance, to an elderly person by relatives and friends. Economic appraisals of alternative ways of caring for elderly people have frequently been unable to cost this input although it has often been the major source of help for elderly people who are satisfactorily maintained in their own home. A review of the economic theory of the allocation of time is used to set up three potential methods of evaluating informal care – payment of state benefits to carers, the costs of appropriate public services and the valuation of time used in the appraisal of investment in different forms of transport. Each of these bases is assessed in accordance with theory which underpins it, its use in economic appraisals and its applicability to costing alternative patterns of care for the elderly. It is argued that amongst helpers there is a variety of attitudes to the work involved, of household circumstances and of opportunities gained or lost. Thus, one value is unlikely to cover all eventualities and there is a need to experiment with mix of valuation procedures. The effect on the costs of community care for elderly people of using different approaches is illustrated from one study of alternative patterns of care for the elderly and the following important points emerge from the exercise: - For some principle helpers, all the caring they undertake is a pleasant and acceptable use of their leisure time. - The acceptability of the caring role appears to depend on the closeness of the relationship between helped and helper. - The valuation of time as used in transport appraisals is probably the method which is closest to the carers’ valuation of their own time. - Carers can often be kept happy in their work for quite small amounts of weekly expenditure on suitable public services.