Research

Working papers

    "Elderly Care Across Europe: The Role of Formal and Informal Care in Family Decision-Making"

    Draft available upon request.

    Abstract: This paper studies the factors that determine families' decisions to provide formal and informal care across Europe. To explain the observed patterns of care provision and labor force participation of children of care recipients, I develop a structural model that represents the interactions among old parents and adult children as a static, non-cooperative game of complete information. I estimate this model using data of Northern, Central and Southern European countries from the Survey of Health, Aging and Retirement in Europe. The model is able to replicate the choices made by families in the three regions considered well. Equipped with the estimated model, I carry out a decomposition analysis of the forces behind differences in formal and informal care use across Europe. The results of this exercise indicate that the variability in care arrangements across regions can be largely explained by model parameters that capture the influence of care prices and social norms, and by wage levels. Next, I use the estimated model to assess various types of subsidies to support care recipients and caregivers. I find that subsidies for family caregivers are more effective than subsidies for care recipients to meet elderly care needs in Southern Europe.

    "Your Job or Your Folks? Working and Caring for Elderly Parents in Europe"

    Draft available upon request.

    Abstract: This paper studies the effect of the provision of informal care to parents on labor supply decisions, focusing on the intensive margin. For this purpose, I build a static, structural model featuring an agent who is altruistic towards their parent and allocates their time and budget to consumption, hours worked, and hours of formal and informal care to maximize utility. I estimate this model using data of Northern, Central and Southern European countries from the Survey of Health, Aging and Retirement in Europe. The estimated model provides valuable insights into the mechanisms driving time allocation decisions. In particular, I concentrate on the role played by wages, prices of formal care, and family ties. Then, I use the model to simulate the reactions of agents to unconditional cash benefits and discounts on formal care prices. These simulations show that cash benefits induce agents to substitute hours worked for hours of informal care, while formal care price discounts give place to replacing hours of informal care for hours of formal care.