Abstract
The aims of this study were to analyse (1) whether informal care, provided by children or grandchildren to their elderly parents, and formal care are substitutes or complements, and (2) whether this relationship differs across Europe. The analyses were based on cross-sectional data from the newly developed SHARE (Survey of Health, Ageing, and Retirement in Europe) database. We found (1) that informal and formal home care are substitutes, while informal care is a complement to doctor and hospital visits, and (2) that these relationships in some cases differ according to a European north-south gradient. Instrumental variable methods were used and the results highlight the importance of accounting for the endogeneity of informal care.
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