Thinking of incentivizing care? The effect of demand subsidies on informal caregiving and intergenerational transfers

Joan Costa-Font and Sergi Jiménez-Martín
Authors registered in the RePEc Author Service: Sergi Jimenez-Martin

No 929, Working Papers from Barcelona School of Economics

Abstract: We still know little about what motivates the informal care arrangements provided in old age. The introduction of demand-side subsidies such as unconditional caregiving allowances (cash benefits designed either to incentivize the provision of informal care, or compensate for the loss of employment of informal caregivers) provide us with an opportunity to gain a further understanding of the matter. In this paper we exploit a quasi-natural experiment to identify the effects of the inception in 2007 (and its reduction in 2012) of a universal caregiving allowance on both the supply of informal care, and subsequent intergenerational transfer flows. We find evidence of a 30% rise in informal caregiving after the subsidy, and an increase (reduction) in downstream (upstream) intergenerational transfers of 29% (and 15%). Estimates were heterogeneous by income and wealth quantiles. Consistently, the effects were attenuated by a subsequent policy intervention; the reduction of the subsidy amidst austerity cuts in 2012.

Keywords: Intergenerational Transfers; caregiving; differences-in-differences; long-term care; family transfers; exchange motivation; caregiving allowances; demand-side subsidies (search for similar items in EconPapers)
JEL-codes: D14 G22 I18 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-age and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Do Public Caregiving Subsidies and Supports affect the Provision of Care and Transfers? (2022)
Working Paper: Do public caregiving subsidies and supports affect the provision of care and transfers? (2022)
Working Paper: Thinking of Incentivizing Care? The Effect of Demand Subsidies on Informal Caregiving and Intergenerational Transfers (2018)
Working Paper: Thinking of incentivizing care? The effect of demand subsidies on informal caregiving and intergenerational transfers (2017)
Working Paper: Thinking of Incentivizing Care? The Effect of Demand Subsidies on Informal Caregiving and Intergenerational Transfers (2016)
Working Paper: Thinking of Incentivizing Care? The Effect of Demand Subsidies on Informal Caregiving and Intergenerational Transfers (2016)
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