Does Informal Care from Children to their Elderly Parents Substitute for Formal Care in Europe?

This paper analyzes the impact of informal care by adult children on the use of long-term care among the elderly in Europe and the effect of the level of the parent’s disability on this relationship. We focus on two types of formal home care that are the most likely to interact with informal care: paid domestic help and nursing care. Using the most recent European data emerging from the Survey on Health, Ageing and Retirement in Europe (SHARE), we build a two-part utilization model analyzing both the decision to use each type of formal care or not and the amount of formal care received by the elderly. Instrumental variables estimations are used to control for the potential endogeneity existing between formal and informal care. We find endogeneity of informal care in the decision to receive paid domestic help. Estimation results indicate that informal care substitutes for this type of formal home care. However, we find that this substitution effect tends to disappear as the level of disability of the elderly person increases. Finally, informal care is a weak complement to nursing care, independently of the level of disability. These results highlight the heterogeneous effects of informal care on formal care use and suggest that informal care is an effective substitute for long-term care as long as the needs of the elderly are low and require unskilled type of care. Any policy encouraging informal care to decrease long-term care expenditures should take it into account to assess its effectiveness.

Executive Summary of Work Package 3 on Availability and Choice of Care of the ANCIEN Project. ENEPRI Research Report No. 101, February 2012

Work Package 3 on the Availability and Choice of Care of the ANCIEN project aims to document the forces driving the choice of formal and informal care across European countries and to characterise the linkages between the type of care used by dependent people and a country's institutional setting, which determines the supply of formal and informal care. Different issues related to formal and informal care choices and the LTC (long-term care) institutional setting in the EU have been analysed by the WP3 contributors. This research report summarises each partner’s contribution

Time-Bound Opportunity Costs of Informal Care: Consequences for Access to Professional Care, Caregiver Support, and Labour Supply Estimates

Patterns of informal care are documented throughout the day with Dutch time use diary data. The diary data enable us to identify a, so far overlooked, source of opportunity costs of informal care, i.e. the necessity to perform particular tasks of informal care at specific moments of the day. Some care tasks are relatively unshiftable, while other tasks are shiftable implying that they can be performed at other moments of the day or even on different days. In particular, household and organization activities seem to be shiftable for employed caregivers, while personal care seems to contain unshiftable activities. This implies an additional opportunity cost of providing personal care tasks. As the care recipient’s need for care may be related to the possibility to shift informal care throughout the day, we conclude that one should be careful with using care need as an instrument of informal care in labour supply equations.joint production, informal care, paid work, opportunity cost, use of time, labor supply

Work-life imbalance: informal care and paid employment

In the United Kingdom informal carers are people who look after relatives or friends who need extra support because of age, physical or learning disability or illness. The majority of informal carers are women and female carers also care for longer hours and for longer durations than men. Thus women and older women in particular, shoulder the burden of informal care. We consider the costs of caring in terms of the impact that these kinds of caring responsibilities have on employment. The research is based on the responses of informal carers to a dedicated questionnaire and in-depth interviews with a smaller sub-sample of carers. Our results indicate that the duration of a caring episode as well as the hours carers commit to caring impact on their employment participation. In addition carers’ employment is affected by financial considerations, the needs of the person they care for, carers’ beliefs about the compatibility of informal care and paid work and employers’ willingness to accommodate carers’ needs. Overall, the research confirms that informal carers continue to face difficulties when they try to combine employment and care in spite of recent policy initiatives designed to help them

The Wage Elasticity of Informal Care Supply: Evidence from the Health and Retirement Study

This paper focuses on the relationship between wages and supply of informal care to elderly parents. Unlike most of the previous research estimating wage elasticities of informal care supply, this study employs instrumental variable technique to account for the fact that the wage rate is likely to be correlated with omitted variables. Based on the data from the 1998 wave of the Health and Retirement Study, the results show that the wage elasticity of informal care supply is negative and larger in magnitude than has been found previously. The lower bound of this elasticity is estimated to be -1.8 for males and -3.6 for females. Additional findings suggest that the wage elasticity of informal care supply diers by the type of care provided to elderly parents, and that it is larger in magnitude among individuals with siblings and those with independently living parents. The analysis also indicates that the reductions in the informal care constitute about 18% of the labor supply response for men and about 56% of the labor supply response for women, which are not compensated by monetary transfers.Wage Elasticity; Informal Care Supply; Labor Supply; Elderly Care; Family Obligations

Projections of use and supply of long-term care in Europe: Policy implications. ENEPRI Policy Brief No. 12, 12 April 2012

Projections of use and supply of formal and informal care carried out in Work Package 6 of the ANCIEN project show that if current patterns of care use and supply prevail, supply of care is likely to fall behind demand. This paper discusses the key policy implications of these findings. Meeting the required care capacity poses multifarious challenges for European welfare states, namely: how to limit the growing burden of LTC expenditure on social security or government budgets, especially in countries that rely heavily on formal care, and how to avoid an increased informal caregiver burden, while at the same time ensuring adequate care for disabled older persons. Technological advances could help close the care gap, by reducing the need for care and boosting the productivity of formal and informal care workers, or by lessening the need for care. As it is impossible to assess whether these efficiency gains will suffice to bridge the care gap, policies should anticipate an increasing care burden and plan accordingly for how to deal with its consequences

User costs and informal payments for care in the largest maternity hospital in Kathmandu, Nepal

Background: Maternity care costs in Nepal include formal and informal payment. Formal include for example the cost for blood or drugs; Informal payments can be voluntary such as gratitude payments, or bribes which patients are ‘expected’ to pay to get decent care or any care at all. One problem is that these payments are missing from formal accounts and they are not taken into account in health-policy decision-making. The aim of the present study was to estimate out-of-pocket expenses (formal/informal) for delivery care in the largest government maternity hospital in Kathmandu, Nepal and establish factors that affect informal costs. Methods: We used mixed-methods approach. We used questionnaire-based interviews with 234 women who had delivered in this hospital followed by semi-structured in-depth interviews with sub-sample of ten couples. SPSS software was used for analysis and cross tabulations and chi square tests, binary logistic regression were performed. Results: Women occurred various costs during a hospital confinement. The qualitative data suggested that some, but not all had started to save prior to the delivery. There is a significant association between making informal payments and whether or not the birth was planned to be in hospital or whether it was an emergency, p=0.025, ANC visits, p=0.008, woman’s occupation,p=0.025 and husband’s employment, p=0.022. Logistic regression suggested four factors associated with making informal payments, indicating a possible socio-economic link with ability to make informal payments. Conclusions: Although informal payments around birth itself were not substantial, such payments are very common. Better understanding of informal payments is important as the illegal status of unofficial health care payments means that it is difficult to establish the prevalence of this phenomenon. Moreover it forms a part of the private health expenditure rarely included in the national health statistics, they create perverse incentives, potentially reduce motivation for reform and will provide information about economic barriers to care

Engaging Family, Friend, and Neighbor Informal Caregivers

The David and Lucile Packard Foundation's Children, Families and Communities program is investing in exploratory projects to learn more about informal care settings. The overall goal of this work is to test strategies to provide information to family, friends, and neighbors (FFN), or informal caregivers, connect them with resources as well as each other, and support them in providing quality care for young children. Harder+Company Community Research, in partnership with the Center for Evaluation Innovation, conducted an evaluation of four informal care grants with an emphasis on learning from and with grantees, and using evaluation tools to support and strengthen the projects

Lone parents and informal childcare: A tax credit childcare subsidy?

The Labour government aims to increase the lone parent employment rate to 70 per cent by 2010. To achieve this aim, it has introduced a state subsidy for childcare in the form of the childcare element of the Working Tax Credit. So far this has been limited to formal childcare despite evidence that lone parents are more likely to use informal childcare. This article investigates the potential of a state subsidy to be extended to support informal childcare. Utilizing evidence from a study of 78 qualitative in-depth interviews with lone parents, it explores preferences for informal care and the way that informal care is negotiated. On the one hand, we found that some lone parents held deeply embedded preferences for informal childcare based on trust, commitment, shared understandings and children's happiness. Thus it can be concluded that it is important for the government to support informal as well as formal care. On the other, we found that the way lone parents actually negotiated informal childcare involved complex notions of obligation, duty and reciprocity, suggesting that a subsidy could potentially intrude upon complex private family relationships. However, the evidence suggests that care was negotiated differently depending on whether it was provided by a grandparent or other family and friends, with lone parents tending to favour paying for childcare provided by other family and friends than grandparents. This has implications for a state subsidy, which needs further investigation

Informal and formal care in Europe

Government expenditure on formal residential care and home-help services for the elderly significantly reduces 45-59 year old women´s informal care-giving affecting both the extensive and the intensive margin. Allowing for country fixed-effects and country-specific trends and correcting for attrition, the estimates - based on the European Community Household Panel - imply that a 1000 Euro increase in the government expenditure on formal residential care and home-help services for the elderly decreases the probability of informal care-giving outside of the caregiver´s household by 6 percentage points. Formal care substitutes for informal care that is undertaken outside of the carer´s own household, but does not substitute for intergenerational household formation. A simulation exercise shows that an increase in government formal care expenditure can be used to increase the labour force participation rates and a back-of-envelope cost-benefit calculation suggests the policy to be cost-effective