Access to Long-Term Care After a Wealth Shock: Evidence from the Housing Bubble and Burst

Joan Costa Font, Richard Frank, Katherine Swartz

NBER Working Paper No. 23781
Issued in September 2017
NBER Program(s):Economics of Aging, Health Care

Home equity is the primary self-funding mechanism for long term services and supports (LTSS). Using data from the relevant waves of the Health and Retirement Study (1996-2010), we exploit the exogenous variation in the form of wealth shocks resulting from the value of housing assets, to examine the effect of wealth on use of home health, unpaid help and nursing home care by older adults. We find a significant increase in the use of paid home health care and unpaid informal care but no effect on nursing home care access. We conduct a placebo test on individuals who do not own property; their use of LTSS was not affected by the housing wealth changes. The findings suggest that a wealth shock exerts a positive and significant effect on the uptake of home health and some effect on unpaid care but no significant effect on nursing home care.

download in pdf format
   (900 K)

email paper

A non-technical summary of this paper is available in the December 2017 NBER Digest.  You can sign up to receive the NBER Digest by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w23781

Published: Costa-Font, Joan & Frank, Richard G. & Swartz, Katherine, 2019. "Access to long term care after a wealth shock: Evidence from the housing bubble and burst," The Journal of the Economics of Ageing, Elsevier, vol. 13(C), pages 103-110. citation courtesy of

Users who downloaded this paper also downloaded* these:
Graham and Leary w23767 The Evolution of Corporate Cash
Foster and Rosenzweig w23909 Are There Too Many Farms in the World? Labor-Market Transaction Costs, Machine Capacities and Optimal Farm Size
Konetzka, Lasater, Norton, and Werner w23402 Are Recessions Good for Staffing in Nursing Homes?
Bakkensen and Barrage w23854 Flood Risk Belief Heterogeneity and Coastal Home Price Dynamics: Going Under Water?
Caruso, Galiani, and Ibarrarán w23797 Long-Term Care in Latin America and the Caribbean? Theory and Policy Considerations
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us