Access to Long Term Care after a Wealth Shock: Evidence from the Housing Bubble and Burst

34 Pages Posted: 22 Feb 2018

See all articles by Joan Costa-Font

Joan Costa-Font

London School of Economics & Political Science (LSE)

Richard G. Frank

Harvard Medical School; National Bureau of Economic Research (NBER)

Katherine Swartz

Harvard School of Public Health, Harvard University

Multiple version iconThere are 2 versions of this paper

Date Written: January 17, 2018

Abstract

Home equity is the primary self-funding mechanism for long term services and supports (LTSS). Using data from the relevant waves of the Health and Retirement Study (1996-2010), we exploit the exogenous variation in the form of wealth shocks resulting from the value of housing assets, to examine the effect of wealth on use of home health, unpaid help and nursing home care by older adults. We find a significant increase in the use of paid home health care and unpaid informal care but no effect on nursing home care access. We conduct a placebo test on individuals who do not own property; their use of LTSS was not affected by the housing wealth changes. The findings suggest that a wealth shock exerts a positive and significant effect on the uptake of home health and some effect on unpaid care but no significant effect on nursing home care.

Keywords: long term care, housing equity, housing bubble, informal care, home health care, nursing home care

JEL Classification: I180, J140

Suggested Citation

Costa-Font, Joan and Frank, Richard G. and Swartz, Katherine, Access to Long Term Care after a Wealth Shock: Evidence from the Housing Bubble and Burst (January 17, 2018). CESifo Working Paper Series No. 6823. Available at SSRN: https://ssrn.com/abstract=3127352

Joan Costa-Font (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://https://joancostaifont.org/

Richard G. Frank

Harvard Medical School ( email )

Department of Health Care Policy
Boston, MA 02115
United States
617-432-0178 (Phone)
617-432-1219 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Katherine Swartz

Harvard School of Public Health, Harvard University ( email )

677 Huntington Avenue
Kresge Building, Room 404
Boston, MA 02115
United States
617-432-4325 (Phone)
617-432-4494 (Fax)

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