Long-Term Care Across Europe and the United States: The Role of Informal and Formal Care

Large cross-country variation in long-term-care (LTC) policy in conjunction with household-level data on caregiving provides a valuable laboratory for policy analysis. However, there is a lack of comprehensive cross-country data on how care is provided. In order to close this gap, we draw on data from the Survey of Health, Ageing, and Retirement in Europe (SHARE) and the Health and Retirement Study (HRS) in the United States. Because care hours are missing for some care forms (especially for nursing-home residents), we propose a selection model to impute these. The model allows selection into care forms to differ by country. Our estimates imply that nursing-home residents have higher care needs, even when conditioning on observed characteristics. In contrast to the bulk of the literature, we also take into account care provision from persons in the same household, and we find that this contributes one-third of all care hours. Informal-care provision in Europe follows a steep North-South gradient, with the United States falling in between Central European and Southern European countries. The results are robust to alternative imputation schemes.