Paying for Care: Household Budgets and Domestic Care in Italy

Furio Rosati () and Lisa Capretti
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Furio Rosati: University of Rome Tor Vergata
Lisa Capretti: University of Rome Tor Vergata

No 19090, IZA Discussion Papers from IZA Network @ LISER

Abstract: Paid domestic care is an important part of ageing-at-home policies, yet it competes with other household needs for limited resources. We estimate a two-stage demand system using the Italian Household Budget Survey for 2014–2023, focusing on households with at least one member aged 65 or over. The first stage allocates total expenditure across broad consumption categories; the second divides the health-and-care budget among medical services, health products and paid domestic care. Health-and-care expenditure rises more than proportionally with total expenditure, and domestic care is the most expenditure-responsive component within that budget. The linked expenditure elasticity is 1.678. Demand among existing domestic-care purchasers is also price elastic. With a 10 per cent reduction in the consumer price, their quantity purchased rises by 29.9 per cent, while predicted participation increases by 7.4 percentage points in the lower-block population. The quartile simulations suggest a stronger participation response among lower-expenditure households. These results distinguish support for existing users from access to paid care and suggest a role for affordability, and indicate that demand for paid care is responsive to policy.

Keywords: household demand; domestic care; ageing at home; health and care; long-term care; AIDS; censored AIDS; Italy (search for similar items in EconPapers)
JEL-codes: C34 D12 I11 J14 (search for similar items in EconPapers)
Date: 2026-11
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