Do Public Caregiving Subsidies and Supports affect the Provision of Care and Transfers?

The Hidden Value of Adult Informal Care in Europe

The hidden value of adult informal care (IC) refers to the unaccounted value of informal care in overall costs of long-term care (LTC) estimates. This paper estimates the net value of adult IC in Europe, drawing on a well-being-based methodology. We use an instrumental variable strategy and a longitudinal and cross-country dataset to estimate the causal effect of the extensive and intensive margin of caregiving on subjective well-being. We estimate the so-called compensating surplus (CS), namely the income equivalent transfer, to compensate for the net disutility of caregiving. We show that IC reduces average subjective well-being by about 1% compared to the mean (6% among co-residential caregivers). Relative to a country's Gross Domestic Product (GDP), the value of IC ranges between 4.2% in France and 0.85% in Germany. Such relative value declines as the country's share of formal LTC spending increases. These results call for a reconsideration of the existing classifications of LTC regimes. We estimate that the average CS per hour for IC is 9.55€, with a range from 22€ per hour in Switzerland to 5€ per hour in Spain. Additionally, we estimate that the long-term CS (estimated using an individual's permanent income) tends to be lower than short-term CS (estimated using an individual's current income).

Willingness to Care-Financial Incentives and Caregiving Decisions

As population aging will likely lead to an increasing number of people in need of care, the demand for informal care is expected to rise. In this context, it is often discussed whether financial incentives can motivate more individuals to assume caregiving responsibilities. We analyze the potential effect of financial incentives on the provision of informal care by estimating a structural model with endogenous labor supply and caregiving decisions. This allows us to investigate how both individual wages and financial compensations for caregiving affect the caregiving decision, while accounting for heterogeneous preferences. We find that wage increases are associated with a decreased willingness to care. Financially compensating potential carers for the opportunity costs from caregiving significantly increases the probability of providing care. However, across different subgroups, a large share of about 50% of potential carers remains unwilling to provide care despite the financial incentive. For these individuals, factors such as preferences and social norms outweigh financial considerations in their caregiving decision.

Choice of formal and informal care among community-dwelling older people with or without dementia under a long-term care insurance pilot program in China

OBJECTIVE

This study examines the use of publicly funded formal and informal care among community-dwelling long-term care insurance (LTCI) beneficiaries in China and how dementia differentiates the choice of care.

METHODS

Using administrative data from a LTCI pilot scheme in Guangzhou (n = 2043), we conducted a multinomial logistic regression to examine the association between dementia and the choice of family members (informal unpaid care), domestic helpers (informal paid care) and care workers (formal care), controlling for demographics, living environment and intensity of paid care hours.

RESULTS

Most LTCI beneficiaries chose a family member (65%), followed by a domestic helper (21%) and a care worker (14%). After controlling for covariates, LTCI beneficiaries with dementia were more likely than their counterparts without dementia to choose care provided by a care worker (RRR: 1.73) or a living-in helper (RRR: 1.43) than a family member.

CONCLUSIONS

A preference for informal care was observed among LTCI beneficiaries in China. Those with dementia were more likely than those without dementia to use care provided by non-family caregivers. The pilot scheme findings provide further insight into care recipients' preferences for service utilisation and how dementia impacts these preferences, which should be considered in future policy and service provision.

Caregiving across generations: Do older adults with more grandchildren get another bite at the "sandwich" generation?

Understanding the influence of grandchildren on long-term care use is a growing issue. Indeed, many countries, middle-aged adults provide unpaid care for aging family members, often their parents, at home. Although the influence of adult children's availability on their aging parents' caregiving decisions has been widely studied, the influence of grandchildren remains largely unstudied. Parental time allocated to childcare may compete with elder care, necessitating paid home care or transfer to a nursing home. Alternatively, grandparents may provide childcare, increasing incentives to keep grandparents at home. Using data from the Survey of Health, Ageing and Retirement in Europe (75,296 observations from 11 countries covering years 2004-2018), we exploit an instrumental variable strategy to study the effect of grandchildren on grandparents' long-term care decisions, specifically, use of paid home care or transfer to a nursing home. We use the generosity of maternity leave policies in time and across countries as an instrumental variable to identify the effect of the number of grandchildren. We find that the presence of grandchildren significantly increases the likelihood of having grandparents live at home: the probability of paid home care significantly increases while the probability of nursing home admission falls significantly. In conclusion, policies influencing the number of grandchildren in families have an indirect impact on long-term care use trajectories, confirming that family policies and long-term care policies are strongly imbricated and should not be considered separately.