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Labour Supply and Informal Care Supply: The Impacts of Financial Support for Long-Term Elderly Care

Author

Listed:
  • Hollingsworth, Bruce

    (Lancaster University)

  • Ohinata, Asako

    (University of Leicester)

  • Picchio, Matteo

    (Marche Polytechnic University)

  • Walker, Ian

    (Lancaster University)

Abstract

We investigate the impact of a policy reform, which introduced free formal personal care for all those aged 65 and above, on caregiving behaviour. Using a difference-in-differences estimator, we estimate that the free formal care reduced the probability of co-residential informal caregiving by 12.9%. Conditional on giving co-residential care, the mean reduction in the number of informal care hours is estimated to be 1.2 hours per week. The effect is particularly strong among older and less educated caregivers. In contrast to co-residential informal care, we find no change in extraresidential caregiving behaviour. We also observe that the average labour market participation and the number of hours worked increased in response to the policy introduction.

Suggested Citation

  • 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," IZA Discussion Papers 10988, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10988
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    References listed on IDEAS

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    1. Costa-Font, Joan & Jiménez-Martín, Sergi & Vilaplana-Prieto, Cristina, 2022. "Do Public Caregiving Subsidies and Supports affect the Provision of Care and Transfers?," Journal of Health Economics, Elsevier, vol. 84(C).
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    6. 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.
    7. A. Colin Cameron & Douglas L. Miller, 2015. "A Practitioner’s Guide to Cluster-Robust Inference," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 317-372.
    8. Asako Ohinata & Matteo Picchio, 2020. "Financial support for long-term elderly care and household saving behaviour," Oxford Economic Papers, Oxford University Press, vol. 72(1), pages 247-268.
    9. Brewer Mike & Crossley Thomas F. & Joyce Robert, 2018. "Inference with Difference-in-Differences Revisited," Journal of Econometric Methods, De Gruyter, vol. 7(1), pages 1-16, January.
    10. Orsini, Chiara, 2010. "Changing the way the elderly live: Evidence from the home health care market in the United States," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 142-152, February.
    11. James G. MacKinnon & Matthew D. Webb, 2017. "Wild Bootstrap Inference for Wildly Different Cluster Sizes," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 32(2), pages 233-254, March.
    12. Sarah Karlsberg Schaffer, 2015. "The Effect of Free Personal Care for the Elderly on Informal Caregiving," Health Economics, John Wiley & Sons, Ltd., vol. 24(S1), pages 104-117, March.
    13. Gilles Duranton & Vassilis Monastiriotis, 2002. "Mind the Gaps: The Evolution of Regional Earnings Inequalities in the U.K., 1982–1997," Journal of Regional Science, Wiley Blackwell, vol. 42(2), pages 219-256, May.
    14. Matthew D. Webb, 2023. "Reworking wild bootstrap‐based inference for clustered errors," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(3), pages 839-858, August.
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    Cited by:

    1. Mark Kattenberg & Pieter Bakx, 2018. "Are substitute services a barrier to controlling long-term care expenditures?," CPB Discussion Paper 382, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Fischer, Björn & Müller, Kai-Uwe, 2020. "Time to care? The effects of retirement on informal care provision," Journal of Health Economics, Elsevier, vol. 73(C).
    3. Mark Kattenberg & Pieter Bakx, 2018. "Are substitute services a barrier to controlling long-term care expenditures?," CPB Discussion Paper 382.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Ando Michihito & Furuichi Masato & Kaneko Yoshihiro, 2021. "Does universal long-term care insurance boost female labor force participation? Macro-level evidence," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-50, May.
    5. Guillermo Montt, 2018. "Too polluted to work? The gendered correlates of air pollution on hours worked," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-18, December.
    6. Mark Kattenberg & Pieter Bakx, 2021. "Substitute services: a barrier to controlling long-term care expenditures," European Journal of Ageing, Springer, vol. 18(1), pages 85-97, March.

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    More about this item

    Keywords

    long-term elderly care; ageing; financial support; informal caregiving; 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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