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CEP discussion paper
Informal care and the great recession
Joan Costa-Font, Martin Karlsson and Henning Oien
June 2015
Paper No' CEPDP1360:
Full Paper (pdf)

JEL Classification: I18

Tags: long-term care; informal care; great recession; downturn; old age dependency

Macroeconomic downturns can have both an important impact on the availability of informal care and the affordability of formal long-term care. This paper investigates how the demand for and provision of informal care changed during and after the Great Recession in Europe. We use data from the Survey of Health, Aging and Retirement in Europe (SHARE), which includes a rich set of variables covering waves before and after the Great Recession. We find evidence of an increase in the availability of informal care and a reduction in the use of formal health services (doctor visits and hospital stays) after the economic downturn when controlling for year and country fixed effects. This trend is mainly driven by changes in care provision of individuals not cohabiting with the care recipient. We also find a small negative association between old-age health (measured by the number of problems with activities of daily living) and crisis severity. The results are robust to the inclusion o f individual characteristics, individual-specific effects and region-specific time trends.