FORMAL HOME HEALTH CARE,INFORMAL CARE,AND FAMILY DECISION MAKING* |
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| Authors: | David Byrne Michelle S Goeree Bridget Hiedemann Steven Stern |
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| Institution: | 1. Federal Reserve Board, U.S.A.;2. University of Zurich, Switzerland, University of Southern California, U.S.A.;3. University of Seattle, U.S.A.;4. University of Virginia, U.S.A.;5. We would like to thank Shelly Lundberg, Robert Moffitt, Liliana Pezzin, Stephanie Schmidt, Frank Sloan, Ken Wolpin, and workshop participants at Duke, Maryland, Penn, Queens, RAND, Seattle, Toronto, University College London, Virginia, and Western Ontario for helpful comments. All remaining errors are ours. The views expressed are not necessarily the views of the Federal Reserve System. Please address correspondence to: Steven Stern, Department of Economics, University of Virginia, Charlottesville, VA 22901. Phone: 434 924 6754, Fax: 434 982 2904. E‐mail: . |
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| Abstract: | We use the 1993 wave of the Assets and Health Dynamics Among the Oldest Old (AHEAD) data set to estimate a game‐theoretic model of families' decisions concerning the provision of informal and formal care for elderly individuals. The outcome is the Nash equilibrium where each family member jointly determines her consumption, transfers for formal care, and allocation of time to informal care, market work, and leisure. We use the estimates to decompose the effects of adult children's opportunity costs, quality of care, and caregiving burden on their propensities to provide informal care. We also simulate the effects of a broad range of policies of current interest. |
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