The effect of free personal care for the elderly on informal caregiving

Population forecasters have predicted that the proportion of people in the UK aged 65 years and older will rise significantly in coming decades. This shift in demographics will put increasing pressure on the National Health Service and providers of social care. However, older people do not rely only on care provided by the state; informal care of the elderly is often supplied by family and friends. Therefore, the relationship between formal and informal care and the reaction of informal carers to institutional changes is an important policy issue. This study uses individual level data from the British Household Panel Survey to estimate the effects of the introduction of free personal care for the elderly in Scotland on informal care behaviour. As the change in policy applied only to Scotland, a natural experiment is formed allowing a difference-in-differences approach to be used. This paper finds that the introduction of the policy increased the probability of women supplying informal care by around six percentage points. In addition, for both sexes, it reports evidence of a shift away from the upper and lower tails towards the middle of the hours of care distribution as a result of the change in policy. Copyright © 2015 John Wiley & Sons, Ltd.