Understanding vulnerability and patterns of elderly-care in Europe : essays on formal and informal care, multidimensional measures of vulnerability and social exclusion

Abstract

This dissertation addresses two main challenges for the Economics of social protection in Europe, namely, the measurement of multidimensional vulnerability conditions and the interplay between the public and the family support to population in need. The first two chapters focus on availability, accessibility and utilization of long-term care (LTC) among vulnerable elderly adults in Europe. We review assessment-of-need and eligibility frameworks for public home-care benefits (in kind or in cash) in European countries and regions, and show that coverage of formal LTC systems is significantly affected by cross-countries and within-countries heterogeneities in the definition and the measurement of vulnerability conditions. Accounting for regulations heterogeneity in empirical analyses allows us to identify individual characteristics that affect access to home-care among the eligible individuals. Indeed, an important role of (low) education is found, as a predictor of potential LTC failures, i.e., situations in which individuals do not receive any public formal assistance, although being eligible for it. The second chapter investigates the trade-off between formal and informal home-care for vulnerable elderlies in Austria, Belgium, Germany and France. We focus on a direction of causality of high policy-relevance, i.e., whether an increase (decrease) in the formal provision of home-care would crowd out (be substituted by) informal caregiving. Difficulties arise in finding reasonable and valid exclusion restrictions for formal care which is a potentially endogenous determinant of informal-care. We adopt a two-part model introduced by Duan et al. (1983) where we instrument the utilization of formal care with an individual-specific variable, built on the analysis in chapter one, that captures the eligibility status to local LTC programmes. Using data from SHARE, we find evidence of a positive relationship between the two sources of care. This suggests the existence of a residual demand for LTC, unmet by public programmes (Stabile et al., 2006) that is satisfied by additional formal and informal sources. This also implies that proactive formal-care policies could lead to positive results in terms of healthy-ageing agendas, and that reductions in public LTC coverage should be planned carefully, as they can result in a net decrease of the overall care provided to the elderly population. Finally, the third chapter goes back to the methodology and rationale of measuring multi-dimensional socio-economic phenomena. In particular, we focus on the concept of Social Exclusion (defined by the European Council), a multi-faceted condition of weakness that prevents groups of individuals from taking part to an active social and working life in a community. Basing on a flexible CES framework, we show how different methodological approaches generate contradictory measures of Exclusion at regional level in Europe, primarily because of different strategies (and hidden shadow prices) in data normalization and aggregation. In particular, we argue that normalization is among these implicit forms of weighting and that it is often not made transparent enough, both in terms of how it is performed and in terms of its (economic) implications on the trade-offs which are intrinsic to any multidimensional measure. We then propose and develop an alternative measure of Social Exclusion at European regional level, with normalization parameters elicited through a survey conducted among the Ca’ Foscari Alumni of the Departments of Economics and Management in Venice.