The relationship between regional spending on aged care and informal caring

Event details

Abstract:

Limited evidence exists on the relationship between government spending on aged care and informal care supply. Most literature has concentrated on the demand for informal care and formal aged care. Understanding what factors impact informal care supply can help governments better align long term care policy. This is particularly important given informal care supply in developed countries will decrease further as populations age. We estimate the relationship between government spending on aged care and informal care supplied in Australia. We draw on a large nationally representative survey, linked to region-level government aged care spending data. Using individual-level fixed-effects estimation, we find a statistically significant negative relationship between government spending on aged care delivered in the home and the probability of being an informal carer to someone living elsewhere, suggesting a substitution effect. The rate of substitution depends on informal carer characteristics including age, gender, presence of dependent children, full-time employment and cultural background. We find no significant relationship between government spending on nursing homes and informal care supply. Sensitivity analyses show the significance of the substitutive relationship between in-home aged care and informal care is robust to the influence of unobserved confounders, simultaneity bias and endogeneity from location choices of individuals. We conclude that increased government spending on in-home aged care may reduce informal care provision, thereby limiting any increase in the total amount of total care received by older people.

If you are not a member of University of York staff and are interested in attending the seminar, please contact Adrian Villasenor-Lopez or Dacheng Huo so that we can ensure we have sufficient space.

Henry Cutler

Professor and Director, Centre for Health Economy, Macquarie Business School