Children's
provision of in-kind services to their elderly parents (informal
caregiving) represents an important
form of economic transfers to the elderly.
In this paper, we develop and estimate a joint model of informal
caregiving and labor force
participation decisions of adult daughters who
have a frail elderly parent in a
broader framework of intergenerational
household formation.
Parent and daughter agree to a Nash bargaining
rule as the solution to the
household formation and intrahousehold decision making process.
However, rather than severed relationships, the
threat point is given by a
noncooperative equilibrium defined in terms of
voluntary contributions toward a
public good, the parental "well-being."
Maximum likelihood parameter
estimates derived from the simultaneous,
multiequation, endogenous switching
model are generally consistent with
expectations. Our results indicate that competing demands on daughters'
time reduce both coresidence and
informal caregiving. We also find
that
intergenerational coresidence is an
important mode of assistance to elderly persons. A simulation based on the estimated parameters suggests
that public programs designed to
meet the long-term care needs of elderly
persons by subsidizing formal home
care services may have substantial effects on intergenerational living and care
arrangement decisions.
Liliana
E. Pezzin is an assistant professor at the Johns Hopkins University School of
Medicine. Barbara Schone is an
economist at the Agency for Health Care Policy and Research.
The authors are
grateful to Marjorie McElroy,
Steven Stem, and especially Robert Pollak for many insightful comments
and suggestions. They also benefited from comments by three anonymous
referees. They thank John
Morris at HRCA for graciously
providing the data, and Shirley Morris, Monir Hussein and Karen Pinkston for
assistance in preparing the analysis file.
The views expressed in this paper are those of the authors.
No official endorsement by the AHCPR or the DHHS is intended or should be
inferred The data
used in this article can be
obtained beginning January 2000 through December 2003 from Liliana E.
Pezzin; Johns Hopkins University
School of Medicine; Department of Emergency Medicine; Marburg
B]80; 600 N. Wolfe St.;
Baltimore, MD 21287-2080.
© 2002 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X
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