The Hidden Value of Adult Informal Care in Europe

Joan Costa-Font, Cristina Vilaplana-Prieto and Joan Costa-i-Font

No 11535, CESifo Working Paper Series from CESifo

Abstract: 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 wellbeing value of adult IC in Europe, drawing on a wellbeing-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 wellbeing. Finally, we estimate the so-called compensating surplus (CS), namely the income equivalent transfer to compensate for the net disutility of caregiving. We find that IC reduces average subjective wellbeing by about 1% compared to the mean (6% among co-residential caregivers). Relative to a country’s Gross Domestic Product (GDP), the value of informal care ranges between 4.2% in France and 0.85% in Germany, which is inversely correlated with the country’s share of formal LTC spending and leads to reconsidering LTC regimes. The average CS per hour of IC ranges between 9.55 €/hour, ranging between 22 €/hour in Switzerland and 5 €/hour in Spain. Finally, we also find that long-term CS is smaller than short-term CS.

Keywords: informal care; wellbeing methods; the value of time; caregiving; daughters; life satisfaction (search for similar items in EconPapers)
JEL-codes: I18 J17 J18 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-eur, nep-hap, nep-hea and nep-inv
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Related works:
Journal Article: The Hidden Value of Adult Informal Care in Europe (2025)
Working Paper: The Hidden Value of Adult Informal Care in Europe (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11535

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