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Demography of Aging (1994) / Chapter Skim
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6 Care of the Elderly: Division of Labor Among the Family, Market, and State
Pages 195-216

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From page 195...
... The vast majority of these disabled elderly call on informal sources of support family and friends to assist them. At any point in time, however, slightly more than 5 percent of the elderly are disabled and rely in whole or in part on paid helpers in the community.
From page 196...
... As a result there is no natural division of labor among family care givers, private pay helpers recruited from the marketplace, and state subsidized providers in meeting the nonmedical care needs of the elderly. In this chapter we explore the alliance of the three major sources of personal care in the U.S.: the family, the marketplace, and the state.
From page 197...
... Financial transfers from either the family or the state may be used to purchase care services in the marketplace. Inter vivos financial transfers to the frail elderly and their claims on structured programs augment their own privately held economic resources, including those that result from past
From page 198...
... A frail older person Can recruit family members to provide the necessary personal Care; purchase private Care 3Financial transfers from family and state benefits are not truly independent alternatives for the elderly whose own resources are inadequate to purchase care services in the marketplace. Although receipt of some benefits, such as those from the Medicare and Social security programs, is conditional only on age and/or past employment history, other benefits, such as those from Medicaid and the Supplementary security Income programs, are means tested, requiring depletion of resources.
From page 199...
... Insurance for long-term care, a relatively new product of that industry, underwrites some of the costs of community care and nursing home care for a limited number of subscribers (Meiners and Greenberg, 1989; Cohen et al., 19924. The state's response to the personal care needs of its older dependents is confined largely to subsidizing the costs of such care through the reimbursement of services under a capped schedule of fees.5 By focusing only on personal care we mask an important aspect of inter vivos transfers: transfers responsive to one area of need often yield secondary benefits.
From page 200...
... Second, and more distinctively a policy concern, is apprehension of a possible "woodworking" effect if state subsidized home care benefits were to encourage family helpers to withdraw or reduce their efforts in response to a decline in the price of purchased care. Numerous studies based on national samples using various definitions of disability show that the bulk of personal care received by the frail elderly in the community is provided without compulsion or compensation by family (Branch and Jette, 1983; Stone et al., 1987; Soldo et al., 19891.
From page 201...
... The price of family care may be proxied by the value of family members' time in the 8The National Long-term Care Demonstration is a 10-site project in which publicly subsidized care services were made available to older persons deemed to be at risk for nursing home .
From page 202...
... Neglecting for a moment the potential substitution of nursing home care for any type of community care, it is likely that disabled elderly and their families decide how much total care they prefer to consume and the preferred mix of providers, subject to a variety of constraints. Simple cross-sectional regression models predicting the receipt or level of family care can not render this simultaneity.
From page 203...
... 203 Such studies find limited evidence for Many of the deficiencies found in the existing literature on the substitution of market services for family care reflect nascent theoretical accounts of the demand for personal care in general. Although analysts inevitably model the use of care services as a function of need (usually indexed by physical or cognitive limitations in basic self-care activities)
From page 204...
... the potential substitution of paid helpers for informal care. The predicted probabilities shown in Table 6-3 were estimated under a five-tiered model of the care networks of elderly, widowed mothers living in the community in 1982 (Wolf and Soldo, 1990~.~3 For purposes of this illustration, the .O lathe model estimated uses a multinomial specification of care behaviors and assumes a hierarchical rather than a simultaneous decision-making process.
From page 205...
... Variations in the supply and price of nursing home care are a source of unmeasured heterogeneity in models of home care; variability in the supply of informal caregivers is confounded with other factors (such as marital status) in models predicting entry to a nursing home.
From page 206...
... A full account of the substitution of market resources for family resources awaits not only panel data merged with information on the supply and price of care alternatives but also considerably more developed theoretical formulations. Substitution of Financial for Time Transfers The framework shown in Table 6-2 also highlights the substitution of financial transfers for time transfers.~4 As discussed above, this type of substitution organizes the state's response to the care of frail elderly.
From page 207...
... Nonetheless, existing data suggest that about one-fifth of the elderly may receive either regular or episodic financial transfers from adult children (Soldo and Hill, in press; Stephen et al., 19921. Other data indicate that most of the costs of in-home personal care by paid helpers is borne outof-pocket either by the elderly themselves or in combination with their families (Liu et al., 1985; Wiener and Hanley, 19921.
From page 208...
... Services or financial transfers might be given, for example, in expectation of a bequest or a larger inheritance. Exchange-based accounts of inter vivos transfers predict that increased state subsidies will improve the well-being of the elderly because family transfers would not be reduced.
From page 209...
... Until recently, virtually no data sets provided information sufficient to analyze transfers from which the elderly benefited. Nationally representative surveys that focused on the elderly and their health care needs rarely obtained information on the family structure of the respondent.
From page 210...
... is recorded for each child regardless of household residence. This data array enables researchers to specify the supply of potential informal caregivers in a micro-level analysis (see, for example, Wolf and Soldo, 19901.
From page 211...
... Further research is needed, however, to determine the extent to which these seemingly large helper networks respond to the declining health of older parents. In large segments of minority populations, severe resource constraints operate, which would seem to favor family care over paid care in the community and time transfers over financial transfers.
From page 212...
... To the extent that paid care encourages the sustained work activity of potential providers, substitution also may protect contributions to structured intergenerational transfer programs financed through tax and payroll deductions (e.g., Social Security and Medicare trust funds)
From page 213...
... Hughes 1990 The impact of community care on provision of informal care to homebound elderly persons. Journal of Gerontology 45:S74-S84.
From page 214...
... Liu 1985 Home care expenses for the disabled elderly. Health Care Financing Review 7:5158.
From page 215...
... Davidson, and D McCaffrey 1988 Substitution of formal and informal care for community-based elderly.
From page 216...
... A Longitudinal Investigation of the Substitution of Formal Long Term Care Services for Informal Care. Paper presented at the annual meeting of the Gerontological Society of America.


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