Abstract
In 2002, Scotland introduced a set of reforms which increased the financial support CD C for long-term elderly care. We study how these reforms affected households' propensity to save. Using a difference-in-differences estimator, we find that the policies reduced the household saving rate by 1.9 percentage points. This amounts to an annual reduction in saving of 503 pound. The estimated effect is heterogeneous; the effect is particularly strong among potential care givers (head of household aged in their 40s) and potential care recipients less likely to receive informal care (singles older than 65 living alone).
Highlights
The cost of long-term formal elderly care, offered to individuals aged 65 and above, is often covered entirely by patients
This paper studies the impact of the Scottish Care and Health Act 2002 on the propensity to save of UK household
The Scottish policy legislated that formal personal care be offered to the elderly free of charge
Summary
The cost of long-term formal elderly care, offered to individuals aged 65 and above, is often covered entirely by patients. Guariglia and Rossi (2004) does investigate the impact of private medical insurance on saving in the UK context Their focus is only on younger individuals aged between 25 and 65 and they do not look at long-term care.. Our paper intends to present one of the first studies from outside of the US on the impact of financial support towards the long-term elderly care on the UK household saving behaviour. Scotland and the rest of the UK shared the same public system for the long-term elderly care Since this policy was introduced only in Scotland, UK households outside of Scotland can be used as a control group to disentangle the impact of such a Scottish reform on the saving behaviour of the Scottish households from any other changes in assets induced by time effects common to all the UK regions.
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
