Thinking of Incentivizing Care? The Effect of Demand Subsidies on Informal Caregiving and Intergenerational Transfers
52 Pages Posted: 18 Nov 2016
Date Written: May 2017
We show that demand side cash subsidies to care recipients alter both caregiving and intergenerational transfer decisions. We exploit a quasi-natural experiment referring to the inception of a universal caregiving allowance (in 2007 and its reduction in 2012). We find a caregiving subsidy (of a magnitude of 530€ in 2011) to increase the probability of informal caregiving by 32% (the intensity of care in 13.5 days/year). Similarly, we find that downstream (upstream) intergenerational transfers increased (decreased) in a magnitude of 29% (15%). The effects concentrate among middle and lower income households, and were attenuated by the reduction of the subsidy.
Keywords: caregiving, intergenerational transfers, difference-in-differences, long-term care, family transfers, exchange motivation, caregiving allowances, demand side cash subsidies
JEL Classification: I180, D140, G220
Suggested Citation: Suggested Citation