On average informal caregiving substitutes for home help and nurse visits.•A complementary relationship between informal care and outpatient visits is identified.•The findings vary significantly between different geographical European countries. Background In order to contain public health care spending, European countries attempt to promote informal caregiving. However, such a cost reducing strategy will only be successful if informal caregiving is a substitute for formal health care services. We therefore analyze the effect of informal caregiving for people with dementia on the use of several formal health care services. Study DesignThe empirical analysis is based on primary data generated by the EU-project ‘RightTimePlaceCare’ which is conducted in 8 European countries. 1223 people with dementia receiving informal care at home were included in the study. Methods Using a regression framework we analyze the relationship between informal care and three different formal health care services: the receipt of professional home care, the number of nurse visits and the number of outpatient visits. Results The relationship between formal and informal care depends on the specific type of formal care analyzed. For example, a higher amount of informal caregiving goes along with a lower demand for home care services and nurse visits but a higher number of outpatient visits. Conclusion Increased informal caregiving effectively reduces public health care spending by reducing the amount of formal home care services. However, these effects differ between countries.