Working Paper: NBER ID: w23781
Authors: Joan Costa Font; Richard Frank; Katherine Swartz
Abstract: Home equity is the primary self-funding mechanism for long term services and supports (LTSS). Using data from the relevant waves of the Health and Retirement Study (1996-2010), we exploit the exogenous variation in the form of wealth shocks resulting from the value of housing assets, to examine the effect of wealth on use of home health, unpaid help and nursing home care by older adults. We find a significant increase in the use of paid home health care and unpaid informal care but no effect on nursing home care access. We conduct a placebo test on individuals who do not own property; their use of LTSS was not affected by the housing wealth changes. The findings suggest that a wealth shock exerts a positive and significant effect on the uptake of home health and some effect on unpaid care but no significant effect on nursing home care.
Keywords: Long-term care; Wealth shocks; Housing market; Elderly care
JEL Codes: I18; J14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Housing wealth changes (G51) | LTSS utilization (H53) |
| Reduction in housing wealth (G51) | Increase in paid home health care (I11) |
| Reduction in housing wealth (G51) | Increase in unpaid informal care (J22) |
| Housing wealth changes (G51) | Increase in informal care (J13) |
| Housing wealth changes (G51) | Nursing home care access (I11) |