Micro-econometric analysis of care for the dependent elderly in France: How do formal and informal care interact ?

Louis Arnault, Andreas Goltz and Jérôme Wittwer
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Louis Arnault: LEDa - Laboratoire d'Economie de Dauphine - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres
Andreas Goltz: LEDa - Laboratoire d'Economie de Dauphine - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres
Jérôme Wittwer: LEDa - Laboratoire d'Economie de Dauphine - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres

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Abstract: This paper focuses on the trade-off between formal care and informal care for disabled elderly people living in the community. We propose a simple microeconomic model which describes the simultaneous decision process between potential informal caregivers and disabled elderly person living at home. The model predicts a strict substitution between the two kinds of care. To test the substitution e ffect and assess its intensity, we estimate a recursive simultaneous equation model linked by a copula function, using data from the French\ Handicap Santé Ménages " survey (2008). In contrast with previous literature, the estimated model allows to simultaneously identify both potential causality directions. Thanks to the copula function, strong assumptions about a linear link between the two residuals of both equations do not have to be made. Our results con firm that informal and formal home care are globally substitutes. Nevertheless, the predicted increase of formal care following a reduction of one hour of informal care remains very small. Informal care supply is also weakly sensitive to variations of formal care hours: The substitution e ffect is high only for individuals receiving much more informal than formal care.

Keywords: Long-term Care; Copula Function; Simultaneous Equations Model; Formal Care; Informal Care (search for similar items in EconPapers)
Date: 2012-12-06
Note: View the original document on HAL open archive server: https://hal.science/hal-01458366v1
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Published in 34 èmes journées des Economistes de la Santé, Dec 2012, Reims, France. pp.29

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