Abstract

Given the social and financial implications associated with the expected growth in the demand for Long Term Care (LTC), there is a mounting interest in understanding the determinants of family decisions regarding living arrangements of the elderly, in order to implement effective policy measures aimed at containing costs and enhance the quality of care. This paper estimates the effects of various disabled elderly and family characteristics on the choice of living arrangement and type of care.

We consider over 300 households taken from representative sample of the population of the Italian region Emilia Romagna who have a disable elderly person cared either at home or in a residential arrangement. We investigate the process of family choice testing two alternative specifications. In the first one, we use multinomial unordered models to test the “simultaneous decision process” in which family chooses one of the three following situations: to institutionalise the elderly, to provide care at home trough informal care, to hire an external caregiver to provide care at home. In the second one, we estimate a bivariate probit model with sample selection to analyze the “sequential decision process” in which family choice is assumed to follow a two stage process: in the first stage, the decision is between institutionalisation and home care; in the second stage, families that have kept the elderly person at home, decides whether to become the primary caregiver (informal care) or to hire paid care (formal care).

In the traditional approach, informal and home care tend to coincide. Conversely, we claim that also when a dependent person is kept at home, the choice between informal and paid care is a relevant issue. In Southern Europe, Italy in particular, it is becoming more and more frequent for families to delegate to a third (paid) person the role of primary caregiver also in case of home care, thanks to significant migration flows from developing countries, mostly undocumented and illegal, with a high female component available for personal care work. Among the obtained results, we highlight the predominance for the institutionalisation decision of disability variables as opposed to family characteristics, economic variables and public services availability.

In Italy, social norms about filial responsibility still tend to consider the elderly institutionalisation with a consistent amount of social stigma. The residential choice is strictly influenced by the growing functional or cognitive impairments of the elderly, whereas in the choice between formal and informal care functional status still influences the older person's amount of need for help, but in this case family characteristics and socio-economic variables turn to be more relevant. For many Italian families, the possibility to delegate caregiving by buying services, also on the black market, contributed significantly to reduce nursing home admission rates.

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