What is the Marginal Benefit of Payment-Induced Family Care?
Research on informal and formal long-term care has centered almost solely on costs; to date, there has been very little attention paid to the benefits. This study exploits the randomization in the Cash and Counseling Demonstration and Evaluation program and instrumental variable techniques to gain causal estimates of the effect of family involvement in home-based care on health care utilization and health outcomes. We find that family involvement significantly decreases Medicaid utilization. Importantly, we find family involvement significantly lowers the likelihood of urinary tract infections, respiratory infections, and bedsores, suggesting that the lower utilization is due to better health outcomes.
We would like to acknowledge Barbara Schone, participants in the PHEnOM seminar at the University of Washington, American Economic Association annual meetings, and the International Conference on Evidence-based Policy in Long-Term Care for their helpful comments on previous versions of this paper. Any errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.