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The financial support for long-term elderly care and household saving behaviour

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  • Ohinata, Asako
  • Picchio, Matteo

Abstract

We analyse how the financial support for long-term elderly care affects the household’s propensity to save. Using the difference-in-differences estimator, we investigate the 2002 Scottish reform, which introduced free formal personal care for all the Scottish elderly aged 65 and above. We find that the policy reduced the household saving rate by 1:9 percentage points. This amounts to an annual reduction in the flow of saving of £503. Moreover, the estimated effect is heterogeneous across the age of the head of household. The largest effect is observed when the household head is in his/her 40s, with the reduction in the saving rate of 3:5 percentage points or £1; 213 per year.

Suggested Citation

  • Ohinata, Asako & Picchio, Matteo, 2017. "The financial support for long-term elderly care and household saving behaviour," GLO Discussion Paper Series 43, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:43
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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. 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.
    4. 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.
    5. 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).

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    More about this item

    Keywords

    Long-term elderly care; ageing; means tested financial support; saving rate; 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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