Abstract:

In developed countries, individuals having difficulties to perform the activities of daily living may benefit from public home care subsidies. France distinguishes between handicap schemes, accessible to individuals below age 60, and dependence schemes, for individuals 60 or more. We exploit the exogenous variation in benefit coverage created by the institutional threshold to assess the impact of home care programs on care utilization rates by community-dwelling individuals.

We use a sample of individuals aged 50 to 74, extracted from the French Health and Disability Survey on Households (HSM 2008). HSM survey provides a rich set of socio-demographic characteristics likely to affect home care utilization. As information on disability benefits actually received is poor, we implement a sharp Regression Discontinuity Design strategy by comparing care utilization of individuals below and those beyond the age 60 threshold.

Being a “dependent elderly” rather than a “handicapped adult” increases the probability to receive some home care, seemingly by increasing non-medical formal care utilization. No robust effects on informal care are found. These results hold conditional on living in the community. However, we also provide evidence that home care programs affect living arrangements. Using a small dataset on both community-dwelling and institutionalized individuals, we find that the “dependent” are more likely to be reported as living in an institution than the “handicapped”.

We contribute to the developing literature investigating the impacts of the institutional features of long-term care schemes on care arrangements and the way individuals’ day-to-day difficulties are effectively compensated. Although effects are assessed at the extensive margin only (utilization/non-utilization), our findings raise both efficiency and equity concerns.