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The Limits of Monetizing and Paying for Volunteering in Eldercare: A Behavioral-Economic Approach

Abstract

The monetary value of informal eldercare in the family and voluntary sector has drawn much attention as it concerns a resource of welfare governments and nonprofit organizations try to activate via cash benefits. Studies addressing the issue in order to assess the economic impact of non-market activities and the willingness to accept financial rewards have largely ignored differences in the utility function of caregivers. Applying a behavioral-economic approach, we report a profound and formerly unobserved distinction between care in the household and non-household care for a family member or in a voluntary framework: whereas caregivers within the household perceive care as a burden and a positive shadow price arises, in the non-household context—and particularly in the volunteering case–care extends well-being and leads to negative shadow prices. The results show that non-market activities can only be measured in monetary terms to a limited extent and contribute to explaining the boundaries of monetary incentive policies.

Résumé

La valeur monétaire des soins informels aux personnes âgées au sein de la famille et dans le secteur bénévole a suscité beaucoup d’intérêt, car il s’agit d’une ressource que les administrations du bien-être et les organisations à but non lucratif essaient de mobiliser par des prestations en espèces. Les études qui se sont penchées sur la question pour évaluer les conséquences économiques des activités non marchandes et la propension à accepter les récompenses financières ont largement ignoré les différences au niveau de la fonction d’utilité des personnels soignants. En appliquant une approche de l’économie comportementale, nous faisons état d’une distinction profonde et auparavant non observée entre les soins dans les ménages et les soins extérieurs donnés à un membre de la famille ou dans le cadre bénévole : tandis que les personnels soignants au sein du ménage considèrent les soins comme une charge et une hausse du prix fictif positif, dans le cadre non domestique—et en particulier dans le cas du bénévolat –, les soins comprennent le bien-être et entrainent des prix fictifs négatifs. Les résultats montrent que les activités non marchandes ne peuvent être mesurées qu’en termes monétaires, dans une mesure limitée, et qu’elles contribuent à expliquer les limites des politiques d’incitation monétaire.

Zusammenfassung

Der Geldwert informeller Altenpflege innerhalb der Familie und im gemeinnützigen Sektor erfährt viel Aufmerksamkeit, da es sich um eine Ressource handelt, die Wohlfahrtsstaaten und gemeinnützige Organisationen über Geldleistungen zu aktivieren versuchen. Studien zu diesem Thema, die die wirtschaftlichen Auswirkungen nicht marktbezogener Aktivitäten und die Bereitschaft zur Entgegennahme finanzieller Geldleistungen bewerten, haben die Unterschiede in der Nutzenfunktion der Pflegekräfte weitgehend außer Acht gelassen. Bei Anwendung eines verhaltensökonomischen Ansatzes erkennen wir einen großen, zuvor nicht beobachteten Unterschied zwischen der Pflege im Haushalt und der haushaltsexternen Pflege für Familienangehörige bzw. der Unterstützung auf freiwilliger Basis: während die Pflegenden innerhalb des Haushalts die Pflege als eine Belastung empfinden und ein positiver Schattenpreis entsteht, erhöht die Pflege im haushaltsexternen Kontext - und insbesondere im freiwilligen Bereich - das Wohlbefinden und führt zu negativen Schattenpreisen. Die Ergebnisse zeigen, dass nicht marktbezogene Aktivitäten nur in einem begrenzten Umfang in monetärer Größe gemessen werden können, und erklären die Beschränkungen von politischen Strategien, die monetäre Anreize vorsehen.

Resumen

El valor monetario del cuidado informal de los mayores en la familia y en el sector del voluntariado ha atraído mucha atención ya que concierne a un recurso de bienestar que los gobiernos y las organizaciones sin ánimo de lucro tratan de activar mediante prestaciones económicas. Los estudios que abordan la cuestión con el fin de evaluar el impacto económico de actividades no mercantiles y la disposición a aceptar recompensas financieras han ignorado ampliamente las diferencias en la función de servicio de los cuidadores. Aplicando un enfoque comportamental-económico, informamos de una profunda distinción no observada anteriormente entre los cuidados en el hogar y los cuidados fuera del hogar para un miembro de la familia o en un marco de voluntariado: mientras que los cuidadores dentro del hogar perciben los cuidados como una carga y surge un precio virtual positivo, en el contexto fuera del hogar - y en particular en el caso del voluntariado - los cuidados amplían el bienestar y llevan a precios virtuales negativos. Los resultados muestran que las actividades no mercantiles sólo pueden ser medidas en términos monetarios de forma limitada y contribuyen a explicar los límites de las políticas de incentivos monetarios.

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Fig. 1

Notes

  1. For non-parametric regression, see Härdle (1990).

  2. The term informal care contains all types of support in the field of eldercare provided in the living environment of care recipients, ranging from personal (intimate) care to household help and social integration activities (Van den Berg et al. 2004; Schneider 2006). In accordance with the common German terminology referring to a very narrow concept of personal care (“care” or Pflege as defined by the long-term care insurance), the GSOEP questionnaire covers a regular time investment into the personal care and assistance “of people in need”. Since “care”, unlike the international debate, is not an all-embracing term but exclusively reduced to a narrow scope of activities, we assume that household help and social integration activities are largely neglected. In contrast, the SHARE questionnaire explicitly asks for three types of care: personal care (“dressing, bathing or showering, eating, getting in or out of bed, using the toilet”), practical household help (“with home repairs, gardening, transportation, shopping, household chores”), and help with paperwork (“filling out forms, settling financial or legal matters”). In both surveys, household refers to the standard definition of a private household: a social entity of one or more individuals who share a dwelling as well as meals or living accommodation. Family has been defined by us via ordering a comprehensive list of care recipients in the SHARE data. We follow a wider understanding of family comprising not only the “nuclear family” (i.e., a relationship between man and woman with a shared household and at least one child) but also multi-generation families as well as “patchwork” combinations and homosexual partnerships. In turn, volunteering or voluntary care refers to unpaid and non-compulsory activities for the sake of people outside the own household/family (see “Research Hypotheses” section).

  3. Due to partly implausible hours reported, we set a maximum of 18 h per day for the calculations.

  4. Because of the questionnaire style and the relatively small amount of care hours in the SHARE study, we use hours per month as reference value.

  5. Tables 3 and 4 include a range based on the confidence intervals of the point estimates.

  6. We presupposed a 40-h week of labor time despite the fact that many of the SHARE respondents do not have a formal employment. It makes no difference for interpretation because we can simply take the percentage; that is why we speak not only of income but of a proxy for material wealth.

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Acknowledgments

The financial support from the Generali Zukunfsfonds (GZF) and the Deutsche Forschungsgemeischaft (DFG) via SFB 649 “Ökonomisches Risiko,” Humboldt-Universität zu Berlin, is gratefully acknowledged. The authors like to thank Volker Then, Jurgen Willems, Prof. Manfred G. Schmidt, Prof. Wolfgang K. Härdle, and the participants of a session on volunteering at ISTR’s 11th International Conference 2014 for valuable discussions and helpful comments.

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Kehl, K., Stahlschmidt, S. The Limits of Monetizing and Paying for Volunteering in Eldercare: A Behavioral-Economic Approach. Voluntas 27, 768–789 (2016). https://doi.org/10.1007/s11266-015-9657-0

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Keywords

  • Volunteering
  • Informal care
  • Monetary valuation
  • Well-being
  • Incentives