The Hidden Value of Adult Informal Care in Europe

Joan Costa-Font and Cristina Vilaplana-Prieto ()
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Cristina Vilaplana-Prieto: Universidad de Murcia

No 17490, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 value of adult IC in Europe, drawing on a well-being-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 well-being. Finally, we estimate the so-called compensating surplus (CS), namely the income equivalent transfer, to compensate for the net disutility of caregiving. IC reduces average subjective well-being 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. Such relative value is inversely correlated with the country's share of formal LTC spending, leading to reconsidering LTC regimes. The average CS per hour for IC is 9.55€, with a range from 22€ per hour in Switzerland to 5€ per hour in Spain. Additionally, long-term CS tends to be lower than short-term CS.

Keywords: caregiving; life satisfaction; Informal care; wellbeing methods; the value of time; daughters (search for similar items in EconPapers)
JEL-codes: I18 J17 J18 (search for similar items in EconPapers)
Pages: 84 pages
Date: 2024-12
New Economics Papers: this item is included in nep-age and nep-hap
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Published - published online in: Health Economics , 29 January 2025

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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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