Working Paper: NBER ID: w29520
Authors: Kristin F. Butcher; Kelsey Moran; Tara Watson
Abstract: The U.S. population is aging. We examine whether immigration causally affects the likelihood that the U.S.-born elderly live in institutional settings. Using a shift-share instrument to identify exogenous variation in immigration, we find that a 10 percentage point increase in the less-educated foreign-born labor force share in a local area reduces institutionalization among the elderly by 1.5 and 3.8 percentage points for those aged 65+ and 80+, a 26-29 percent effect relative to the mean. The estimates imply that a typical U.S-born individual over age 65 in the year 2000 was 0.5 percentage points (10 percent) less likely to be living in an institution than would have been the case if immigration had remained at 1980 levels. We show that immigration affects the availability and cost of home services, including those provided by home health aides, gardeners and housekeepers, and other less-educated workers, reducing the cost of aging in the community.
Keywords: No keywords provided
JEL Codes: I11; J14; J15; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| less-educated foreign-born labor force share (J69) | likelihood of institutionalization among the elderly (J26) |
| less-educated foreign-born labor force share (J69) | cost of home services (L84) |
| immigration (F22) | cost of aging in the community (J14) |
| immigration at 1980 levels (J11) | likelihood of living in an institution for U.S.-born individuals over age 65 in 2000 (J14) |