The hidden value of adult in care in Europe

Costa-Font, Joan ORCID: 0000-0001-7174-7919 and Vilaplana-Prieto, Cristina (2024) The hidden value of adult in care in Europe. Health Economics. ISSN 1057-9230 (In Press)

Text (HEfinalclean2WP (002)) - Accepted Version Pending embargo until 1 January 2100. Download (3MB)

Abstract

The hidden value of adult informal care (IC) refers to the unaccounted value of informal care in overall costs of long-term care (LTC) estimates. This paper estimates the net wellbeing value of adult IC in Europe, drawing on a wellbeing-based methodology. We use an instrumental variable strategy and a longitudinal and cross-country dataset to estimate the causal effect of the extensive and intensive margin of caregiving on subjective wellbeing. Finally, we estimate the so-called compensating surplus (CS), namely the income equivalent transfer to compensate for the net disutility of caregiving. We find that IC reduces average subjective wellbeing by about 1% compared to the mean (6% among co-residential caregivers). Relative to a country’s Gross Domestic Product (GDP), the value of informal care ranges between 4.2% in France and 0.85% in Germany, which is inversely correlated with the country’s share of formal LTC spending and leads to reconsidering LTC regimes. The average CS per hour of IC is estimated at 9.55 €/hour, ranging between 22 €/hour in Switzerland and 5 €/hour in Spain. Finally, we also find that long-term CS is smaller than short-term CS.

Item Type:	Article
Additional Information:	© 2024
Divisions:	Health Policy
Subjects:	R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine H Social Sciences > HB Economic Theory
JEL classification:	I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy; Regulation; Public Health J - Labor and Demographic Economics > J1 - Demographic Economics > J17 - Value of Life; Forgone Income J - Labor and Demographic Economics > J1 - Demographic Economics > J18 - Public Policy
Date Deposited:	13 Dec 2024 12:57
Last Modified:	13 Dec 2024 13:30
URI:	http://eprints.lse.ac.uk/id/eprint/126347

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