Impacts of Home-Care Subsidies: Evidence from Quasi-Random Assignment

30 Pages Posted: 25 Oct 2023

See all articles by Yuval Ofek-Shanny

Yuval Ofek-Shanny

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - School of Business & Economics

Avner Strulov-Shlain

University of Chicago - Booth School of Business

Dan Zeltzer

Tel Aviv University - Eitan Berglas School of Economics

Date Written: October 24, 2023

Abstract

We study the impact of subsidizing home-based long-term care on recipients’ health and the labor supply of their working-age children. We use administrative data from Israel on the universe of welfare benefit applications linked with tax records of applicants and their adult children. To address the endogeneity of benefit recipients’ health status, we instrument for benefit receipt using the leniency of randomly assigned evaluators who assess the applicant’s functional status and determine benefit eligibility. We find that for compliers – applicants who receive subsidies only from more lenient evaluators – subsidizing home-based care has large adverse effects on recipient health but no detectable effects on the labor market outcomes of their children. The results are consistent with the crowd-out of self-care for the marginal recipient, highlighting the need to assess the heterogeneous effects of home-care subsidies.

Keywords: home-based long-term care; labor supply

JEL Classification: I13, I18, J22, H53

Suggested Citation

Ofek-Shanny, Yuval and Strulov-Shlain, Avner and Zeltzer, Dan, Impacts of Home-Care Subsidies: Evidence from Quasi-Random Assignment (October 24, 2023). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2023-139, Available at SSRN: https://ssrn.com/abstract=4611846 or http://dx.doi.org/10.2139/ssrn.4611846

Yuval Ofek-Shanny

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - School of Business & Economics ( email )

Lange Gasse 20
Nuremberg, 90403
Germany

Avner Strulov-Shlain (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S Woodlawn Ave
Chicago, IL 60637
United States

Dan Zeltzer

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972(3)640-5824 (Phone)

HOME PAGE: http://www.tau.ac.il/~dzeltzer

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