ABSTRACT
Long-term services in the home are predominately provided by family or friends, with a growing proportion of individuals receiving formal care, or paid care by a professional, or a combination of both. However, the relative benefits to the care recipient of who provides the care are largely unknown. A person’s use of formal and family care is affected by factors that also may affect their outcomes, complicating the estimation of any causal relationship. Using the 2002–2018 Health and Retirement Study (HRS), we examine three types of home-based care combinations: family only, formal only, and both formal and family care. We use an instrumental variables strategy, using family structure as instruments for both formal care and the combination of formal and family care, to estimate the plausibly causal impact of the care provider on self-reported mental and physical health outcomes. We find that, once the endogeneity of the care provider is accounted for, having both formal and family care leads to better self-rated health, mobility and lower depression compared to people receiving family care only. Receiving formal care only does not affect care recipient outcomes compared to receiving family care only. These results are robust to several sensitivity analyses, including different instrument specifications, subsamples of care recipients that do not have a spouse/partner, among women care recipients, and changing the timing of the measurement of the outcomes. These findings are important to consider as we strive to best meet the growing demand for person-centered, high-quality long-term care in the least restrictive setting possible.
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