Abstract

With the ageing of the population in most OECD countries, public policies face new challenges for both the provision of medical and non-medical services to the disabled elderly. Informal care, defined as the unpaid care provided by relatives, still plays a major role in the provision of domestic help and personal care (Colombo et al., 2011), while it has been shown to have detrimental effects on caregivers’s health, labor supply and social life (see for instance Do et al., 2015). Facing the increase in the demand for long term care while having evidence on the “burden” of informal care, public policies tend both to encourage the use of professional care services. In France, the main program targeted to the disabled elderly, the APA program (Allocation personnalisée d’autonomie), partially finances the use of formal care.

Our objective is twofold. We first want to document the potential substitution effects of formal care on informal care provided by children in the context of France. We are then interested in the effect of the formal care consumption on the health of the caregiver. is found to decrease informal care volume, is it associated with the expected improvement of the caregiver health? If formal care is not decreasing the volume of informal care provided by children, does it nonetheless modify the effect of care provision on their health?

We use the representative French survey Handicap Santé (2008), with exhaustive information on the limitations encountered by individuals and on the formal and informal care they receive. For informal caregivers who participated to the part of the survey devoted to carers, we interestingly have additional information on the way they perceive the effect of care provision on their health. To ensure exogeneity of formal care use, we implement an instrumental variable strategy making use of local variations existing in the implementation of the APA program. The program is decentralized to local authorities, the departmental councils, which manage the procedures related to the opening of rights. Using an administrative database from the Ministry of Health (Remontées individuelles), we show that, for a given set of covariates (disability level, sex, age, marital status), the average number of hours open to subsidies varies according to departments and that it correlates with the actual formal care consumption. These departmental indicators are then used to instrument the volume of formal care consumed by individuals.