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The cost of informal care in Europe: New estimates based on the well-being valuation method

2012 Conference Presentation

EconomicsInformal care EU

7 September 2012

The cost of informal care in Europe: New estimates based on the well-being valuation method

Ulrike Schneider, Vienna University of Economics and Business, Austria
Julia Kleindienst, Vienna University of Economics and Business, Austria


Informal care imposes substantial costs on caregivers, though its provision outside the market system can make these difficult to measure. Various studies have provided partial cost estimates of medical expenses or the opportunity cost of carers’ time. For a more comprehensive cost measure, several contingent valuation studies (e.g. (Meijer et al., 2010) have asked carers how much they would need to be paid to provide an extra hour of care (or how much they would pay to avoid it).

Complementing these approaches (and avoiding some of their shortcomings), this paper provides estimates for the net cost of providing informal eldercare across Europe using the subjective well- being valuation method. In doing so, it follows an earlier paper by Van den Berg and Ferrer-i-Carbonell (2007), who used the same approach to monetize the cost of informal care for a sample of 865 Dutch informal caregivers. Our own analysis covers a larger set of countries, using the first two waves of data from SHARE, the Survey of Health, Ageing and Retirement in Europe.

Our study sample comprises 18,436 individuals from eleven countries. The analyses focus on informal care provided by caregivers age 50 and older to frail adults who do not share the carers’ households. Providing informal care may be both a burden and a source of satisfaction, depending on the care environment and burden, as well as the care-givers attitude and relationship with the care recipient. Without needing to model this complication explicitly, the well-being valuation method estimates the net effect of changes in care provision on a caregiver’s happiness. Combining this with the effect of income on subjective well-being yields a monetary measure of the life satisfaction that informal care costs. Simply put, respondents’ subjectively evaluated well-being is regressed on their income, hours of care provided and a number of controls for care environment and burden. Our analysis will account for individual level and country-level variables.

The discussion of findings will address (potential) cross-country differences and differences across subgroups of caregivers. We will thus contribute to the academic and political debate on caregiver support policies in European countries.