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Dependency of the elderly in Europe: consequences of reforms on family care

14th National Competition for Economic Research Grants

Public economics

Senior Researcher : Matthias Kredler

Research Centre or Institution : Universidad Carlos III de Madrid.


Dependency is an increasingly serious problem among elderly people with disabilities. In industrialised countries, elderly people receive the care they need in different ways and in different contexts. Family care at home remains common, but other options, such as professional care at home, residential care and mixed solutions, are becoming increasingly important. This project studies the economic reasons why families opt for different forms of care and how they would react to economic reforms. An economic model consisting in a dynamic interplay between the elderly and their children is proposed.

We aim to answer a number of questions. Would the state save money by paying a subsidy to the family members who take care of the elderly? How expensive are subsidies for formal care in care facilities if we take into account that they will make family care less attractive and therefore fewer families will choose that option? Who would benefit most from different types of subsidies: rich or poor families? It is a fact that in the countries of southern Europe there is more family care than in northern countries. Is that due to the different economic conditions, such as subsidies for residential care and the lower degree of integration of women in the labour market in the south, or to differences in preferences (the culture)?

The project is divided into three phases. First, we will document the differences among countries in the forms of care for the elderly and, in turn, how these vary depending on the economic characteristics of the families. This task will be carried out using data from two extensive longitudinal studies, one European (SHARE) and the other in the United States (HRS). Second, a model will be constructed and evaluated in order to explain any variations in behaviour identified. Finally, simulations will be carried out with this model in order to understand the effects of the different reforms currently being discussed.

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