Do Public Caregiving Subsidies and Supports affect the Provision of Care and Transfers?

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Publisher: Elsevier B.V.
Document Type: Report
Length: 509 words

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Keywords Caregiving; Intergenerational transfers; Unconditional transfer; Long-term care; Family transfers; exchange motivation; Allowances; Spain; Exchange motives Abstract We study whether caregiving and intergenerational transfer decisions are sensitive to changes in economic incentives following the inception of a new unconditional and universal system of allowances and supports, after the introduction of the 2006 Promotion of Personal Autonomy and Care for Dependent Persons Act (SAAD in Spanish), and the ensuing effects of its austerity cuts after 2012. We find that whilst the introduction of a caregiving allowance (of a maximum value of [euro]530 in 2011) increased the supply of informal caregiving by 20-22 percentual points (pp), the inception of a companion system of publicly subsidised homecare supports did not modify the supply of care. Consistent with an exchange motive for intergenerational transfers, we estimate an average 17 pp (8.2-8.7pp) increase (decrease) in downstream (upstream) transfers among those receiving caregiving allowances. Our estimates resulting from the reduction in the allowances and supports after the austerity cuts in 2012 are consistent with our main estimates, and suggest stronguer effects among lower-income families. Author Affiliation: (a) Department of Health Policy, London School of Economics and Political Sceince (LSE), AHIL, IZA and CESIfo (b) Universitat Pompeu Fabra and Barcelona School of Economics (c) Universidad de Murcia * Corresponding author. Joan Costa-Font. Department of Health Policy, London School of Economics and Political Science (LSE), Houghton Street, WC2A 2AE. Article History: Received 10 November 2020; Revised 18 May 2022; Accepted 23 May 2022 (footnote) An earlier version of this paper was circulated under the title "Thinking of Incentivizing Care? The Effect of Demand Subsidies on Informal Caregiving and Intergenerational Transfers". We are specifically grateful for the comments and suggestions made by the journal editor Ana Balsa and the three referees, as well as those by Edward Norton, Courtney van Houtven, Pierre Pestieu, Eric Bonsang, Linda Pickard, Derek King, Tania Burchardt, Jorgen Lauridsen, Christian Kronborg, Catia Nocodemo, Francesco Moscone, Gisela Hostenkamp, Dorte Gyrd-Hansen, Martin Karlsson, Ángel Lopez, Judith Vall, Helena Hernández-Pizarro, Ludovica Gambaro, and the participants of the Informal Payment Cluster Group at the Royal Economic Society Meeting (Bristol, 2017), London School of Economics Meeting of 2020, the School of Economics and Political Science (LSE), the European Society for Population Economics (ESPE) in Berlin (2016), the Health Economics Seminar at COHERE University of Southern Denmark, the Workshop on the Design of Long-Term Care Polices held in Montreal (2016), the Health Economics Seminar at Essen University (2015), Oxford University (2017), and the Spanish Health Economics Association Meeting in Pamplona (2014). All have contributed very constructive comments and suggestions to earlier versions of this paper. We also thank Spain's Ministry of Science, Innovation and Universities (MICINN) and the ERDF for financial support: PID2020-114231RB-I00 and RTI2018-095256-BI00. Sergi Jimenez also acknowledges financial support from Spain's National Research Agency (AEI), through the Severo Ochoa Programme for Centres of Excellence in R&D (Barcelona School of Economics CEX2019-000915-S). The authors bear the sole responsibility for any error, and the usual disclaimer applies. Byline: Joan Costa-Font [] (a,*), Sergi Jiménez-Martín (b), Cristina Vilaplana-Prieto (c)

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Gale Document Number: GALE|A709525731