Review of Economics of the Household

, Volume 12, Issue 2, pp 379–404 | Cite as

Home care for the elderly: the role of relatives, friends and neighbors

  • Adriaan Kalwij
  • Giacomo Pasini
  • Mingqin Wu


We use data from the Survey of Health, Ageing and Retirement in Europe to examine the hours of home care received by the elderly. The existing empirical literature has mostly examined informal home care from children and formal home care. We identify two additional informal home care providers, namely, relatives (other than children) and friends (including neighbors) who provide about 30 % of the hours of informal home care. Our main new empirical finding is that single elderly persons who can rely less on children—and in particular daughters—for their home care receive not only more formal care but also more care from friends and neighbors. These findings suggest that policymakers need to take into account not only home care provision from children but also home care provision from friends and neighbors to obtain accurate projections concerning the increasing costs of formal care programs due to an aging population.


Informal care System of equations Tobit model Aging 

JEL Classification

I38 J12 J14 



We wish to thank Rob Alessie, Eric Bonsang, Bas van Groezen and the seminar participants at the International SHARE User Conference in Mainz, Germany, Utrecht School of Economics, University of Bologna, RWI Essen, Netspar annual workshop, and the London School of Economics (Workshop on the Future of Family Support for Older People and International Conference on Evidence-based Policy in Long Term Care) for valuable comments and discussion. Financial support has also been provided by Stichting Instituut GAK through the Network for Studies on Pensions, Aging and Retirement (NETSPAR), the Tjalling Koopmans Institute (Utrecht University), the Short Stay Ph.D. Fellowship of Utrecht University and Farmafactoring Foundation.


  1. Anderson, R., & Grossman, M. (2009). Health and the household. Review of Economics of the Household, 7(3), 219–226.CrossRefGoogle Scholar
  2. Becker, G. S. (1976). Altruism, egoism, and genetic fitness: Economics and sociobiology. Journal of Economic Literature, 14(3), 817–826.Google Scholar
  3. Bolin, K., Lindgren, B., & Lundborg, P. (2008a). Informal and formal care among single-living elderly in Europe. Health Economics, 17, 393–409.CrossRefGoogle Scholar
  4. Bolin, K., Lindgren, B., & Lundborg, P. (2008b). Your next of kin or your own career? Caring and working among the 50+ of Europe. Journal of Health Economics, 27, 718–738.CrossRefGoogle Scholar
  5. Bonsang, E. (2008). Does informal care from children to their elderly parents substitute for formal care in Europe? Journal of Health Economics, forthcoming.Google Scholar
  6. Byrne, D., Goeree, M. S., Hiedemann, B., & Stern, S. (2009). Formal home health care, informal care, and family decision making. International Economic Review, forthcoming.Google Scholar
  7. Cameron, A. C., & Trivedi, P. K. (2005). Microeconometrics, methods and applications. New York: Cambridge University Press.CrossRefGoogle Scholar
  8. Carmichael, F., & Charles, S. (2003). The opportunity costs of informal care: Does gender matter? Journal of Health Economics, 22(5), 781–803.CrossRefGoogle Scholar
  9. Charles, K. K., & Sevak, P. (2005). Can family caregiving substitute for nursing home care? Journal of Health Economics, 24, 1174–1190.CrossRefGoogle Scholar
  10. Comas-Herrera, A., Wittenberg, R., Costa-Font, J., Gori, C., Di Maio, A., Patxot, C., et al. (2006). Future long-term care expenditure in Germany, Spain, Italy and the United States. Ageing & Society, 26, 285–302.CrossRefGoogle Scholar
  11. Costa-Font, J., Wittenberg, R., Patxot, C., Comas-Herrera, A., Gori, C., et al. (2007). Projecting long-term care expenditure in four European Union member States: The influence of demographic scenarios. Social Indicators Research, 86(3), 303–321.Google Scholar
  12. Dewey, M. E., & Prince, M. J. (2005). Cognitive function. In A. Börsch-Supan, A. Brugiavini, H. Jürges, J. Mackenbach, J. Siegriest, & G. Weber (Eds.), Health, aging and retirement in Europe: First results from the survey of health, aging and retirement in Europe (pp. 118–125). Mannheim: Mannheim Research Institute for the Economics of Aging.Google Scholar
  13. Eurostat (2008). Europe in FiguresEurostat Yearbook 2008.Google Scholar
  14. Fries, J. F. (1980). Aging, natural death, and the compression of morbidity. New England Journal of Medicine, 303, 130–135.CrossRefGoogle Scholar
  15. Fujisawa, R. & Colombo, F. (2009). The long-term care workforce: Overview and strategies to adapt supply to a growing demand. OECD Health Working Paper No. 44. Google Scholar
  16. Grossman, M. (1972). On the concept of health capital and the demand for health. Journal of Political Economy, 80(2), 223–255.CrossRefGoogle Scholar
  17. Hantrais, L. (1999). Socio-demographic change, policy impacts and outcomes in social Europe. Journal of European Social Policy, 9, 291–309.Google Scholar
  18. Ku, L.-J. E., Stearns, S. C., van Houtven, C. H., & Holmes, G. M. (2012). The health effects of caregiving by grandparents in Taiwan: an instrumental variable estimation. Review of Economics of the Household, forthcoming.Google Scholar
  19. Lakdawalla, D., & Philipson, T. (2002). The rise in old-age longevity and the market for long-term care. American Economic Review, 92(1), 295–306.CrossRefGoogle Scholar
  20. Lee, R. (2003). The demographic transition: Three centuries of fundamental change. Journal of Econometric Perspectives, 17(4), 167–190.CrossRefGoogle Scholar
  21. Pezzin, L. E., Pollak, R. A., & Schone, B. S. (2009). Long-term care of the disabled elderly: Do children increase caregiving by spouses? Review of Economics of the Household, 7, 323–339.CrossRefGoogle Scholar
  22. Pezzin, L. E., & Schone, B. S. (1999). Intergenerational household formation, female labor supply and informal caregiving: A bargaining approach. Journal of Human Resources, 34(3), 475–503.CrossRefGoogle Scholar
  23. Pickard, L., Comas-Herrera, A., Costa-Font, J., Gori, C., Di Maio, A., Patxot, C., et al. (2007). Modelling an entitlement to long-term care services for older people in Europe: Projections for long-term care expenditure to 2050. Journal of European Social Policy, 17, 33–48.CrossRefGoogle Scholar
  24. Posnett, J., & Jan, S. (1996). Indirect cost in economic evaluation: The opportunity cost of unpaid inputs. Health Economics, 5, 13–23.CrossRefGoogle Scholar
  25. Reher, D. S. (1998). Family ties in Western Europe: Persistent contrasts. Population and Development Review, 24(2), 203–234.CrossRefGoogle Scholar
  26. Spillman, B. C., & Pezzin, L. E. (2000). Potential and active family caregivers: Changing networks and the “Sandwich Generation”. Milbank Quarterly, 78(3), 339–347.CrossRefGoogle Scholar
  27. Stern, S. (1995). Estimating family long-term care decisions in the presence of endogenous child characteristics. Journal of Human Resources, 30(3), 551–580.CrossRefGoogle Scholar
  28. Van den Berg, B., Brouwer, W. B. F., & Koopmanschap, M. A. (2004). Economic valuation of informal care. European Journal of Health Economics, 5, 36–45.CrossRefGoogle Scholar
  29. van Houtven, C. H., & Norton, E. C. (2004). Informal care and health care use of older adults. Journal of Health Economics, 23, 1159–1180.CrossRefGoogle Scholar
  30. van Houtven, C. H., & Norton, E. C. (2008). Informal care and Medicare expenditures: Testing for heterogeneous treatment effects. Journal of Health Economics, 27, 134–156.CrossRefGoogle Scholar
  31. van Houtven, C. H., Wilson, M. R., & Clipp, E. C. (2005). Informal care intensity and caregiver drug utilization. Review of Economics of the Household, 3, 415–433.CrossRefGoogle Scholar
  32. Wolf, D. A., & Soldo, B. J. (1994). Married women’s allocation of time to employment and care of elderly parents. Journal of Human Resources, Special Issue: The Family and Intergenerational Relations, 29(4), 1259–1276.CrossRefGoogle Scholar
  33. Zhou, C. W., Moore, M. J., & Clipp, E. C. (2003). Dementia problem behavior and the production of informal caregiving services. Review of Economics of the Household, 1, 59–76.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.School of EconomicsUtrecht UniversityUtrechtThe Netherlands
  2. 2.Tilburg UniversityTilburgThe Netherlands
  3. 3.Economics DepartmentCa’ Foscari University of VeniceVeneziaItaly
  4. 4.School of Economics and ManagementSouth China Normal UniversityGuangzhouChina
  5. 5.Network for Studies on Pensions, Aging and RetirementTilburgThe Netherlands

Personalised recommendations