INFORMAL CARE AND ELDERLY HEALTH

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DESCRIPTION: Informal care of the elderly by children is very common, serves as an important substitute to formal care, and is preferred by the elderly both to formal care and to institutionalization. Much work has been done to characterize informal care givers and analyze the effect of care-giving on employment or the reverse. However, there is a dearth of research on how informal care-giving affects health care utilization of the elderly, mainly due to data limitations. The potential for informal care-giving to delay entry into nursing homes, reduce home health care demand, or reduce acute hospital care, may not only improve elderly quality of live, but may have important ramifications for the cost of elderly care, both in the private and public sectors. Understanding the effect of informal care-giving on utilization is vital. With the first of the baby boomers nearing retirement in the next dozen years, the demand for informal care will be larger than ever before, however, with more and more women working then ever before, the supply of informal care-givers may simultaneously shrink. The investigators plan to use the most comprehensive national survey on care giving available, the 1993 and 1995 waves of the Asset and Health Dynamics Among the Oldest-Old (AHEAD) linked to the Medicare claims data. AHEAD has detailed information about health care utilization and expenditures, and most importantly, about informal care giving, including hours of care and types of care. The investigators will use two-part models to predict health care utilization of the elderly for nursing home care, home health care, and acute hospital care. The primary explanatory variable of interest, informal care giving, is endogenous. Identification will either be achieved using discrete factor analysis or using and instrumental variable approach due to potential correlation of the error terms between the decision to utilize health care services and the amount of health care services a person consumes.