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The Impacts of Free Universal Elderly Care on the Supply of Informal Care and Labour Supply*

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<mark>Journal publication date</mark>31/08/2022
<mark>Journal</mark>Oxford Bulletin of Economics and Statistics
Issue number4
Number of pages28
Pages (from-to)933-960
Publication StatusPublished
Early online date17/12/21
<mark>Original language</mark>English


This paper investigates the impact of introducing universal free formal personal care on informal caregiving behaviour in Scotland – in particular, we explore the extent to which free formal care might crowd out the supply of informal care. We estimate, in a difference-in-differences framework, that such a reform would: reduce the probability of co-residential informal caregiving (usually, provided by spouses) by around 18% and, conditional on co-residential caring, reduce such informal care by 1.3 hours per week. These estimates suggest that an additional hour of formal care displaces approximately 1 hour of such informal care. However, we find no displacement effect on extra-residential informal caring (often supplied by adult daughters). We also find evidence of increases in labour market participation and hours worked.

Bibliographic note

Export Date: 4 January 2022 Correspondence Address: Ohinata, A.; Department of Economics, United Kingdom; email: ao160@le.ac.uk Funding details: Medical Research Council, MRC, MR/K022083/1 Funding text 1: Asako Ohinata, Bruce Hollingsworth and Ian Walker gratefully acknowledge financial support from the UK Medical Research Council (MR/K022083/1). References: Adda, J., Berlinski, S., Machin, S., Short-run economic effects of the Scottish smoking ban (2007) International Journal of Epidemiology, 36, pp. 149-154; Arntz, M., Thomsen, S.L., Crowding out informal care? Evidence from a field experiment in Germany (2011) Oxford Bulletin of Economics and Statistics, 73, pp. 398-427; (2001) Free Care Deal for Elderly People, , http://news.bbc.co.uk/1/hi/scotland/1559427.stm, 24 September)., BBC. 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