Effects of Strategic Behavior and Public Subsidies on Families' Savings and Long-Term Care Decisions

Long-Term Care: Economics Issues and Policy Solutions (1996)

Posted: 13 Nov 1997

See all articles by Frank A. Sloan

Frank A. Sloan

Duke University - Center for Health Policy, Law and Management; Duke University, Fuqua School of Business-Economics Group; Duke University - Department of Economics; National Bureau of Economic Research (NBER)

Thomas J. Hoerger

Research Triangle Institute

Gabriel Picone

Department of Economics

Abstract

This study investigates the effects of Medicaid and strategic behavior on (1) the probability of entering a nursing home, (2) amounts of formal and informal care provided elderly persons in the community, and (3) asset accumulation. We find that Medicaid subsidies increase the probability of entry into the nursing home and use of formal care of elderly who remain in the community. However, Medicaid subsidies have not "crowded out" informal care provided by relatives and friends of the elderly. Nor has Medicaid reduced wealth accumulation by the elderly. Overall, we find little empirical support for the hypothesis that caregiving by children is motivated by the prospect of receiving bequests from their parents.

JEL Classification: I1, J1

Suggested Citation

Sloan, Frank A. and Hoerger, Thomas J. and Picone, Gabriel, Effects of Strategic Behavior and Public Subsidies on Families' Savings and Long-Term Care Decisions. Long-Term Care: Economics Issues and Policy Solutions (1996). Available at SSRN: https://ssrn.com/abstract=33300

Frank A. Sloan (Contact Author)

Duke University - Center for Health Policy, Law and Management ( email )

Box 90253
Durham, NC 27708
United States
919-684-8047 (Phone)
919-684-6246 (Fax)

Duke University, Fuqua School of Business-Economics Group ( email )

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United States

Duke University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Thomas J. Hoerger

Research Triangle Institute ( email )

PO Box 12194
Research Triangle Park, NC 27709-2194
United States
919-541-7146 (Phone)
919-541-6683 (Fax)

Gabriel Picone

Department of Economics ( email )

4202 E. Fowler Avenue
Tampa, FL 33620-5500
United States
813-974-6537 (Phone)
813-974-6510 (Fax)

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