Monetising the provision of informal long-term care by elderly people: estimates for European out-of-home caregivers based on the well-being valuation method

Providing informal care can be both a burden and a source of satisfaction. To understand the welfare effect on caregivers, we impute a monetary value for the non-market activity. We use data from the 2006-07 Survey of Health Ageing and Retirement in Europe. To estimate net costs, we follow the subjective well-being valuation method, modelling respondents' life satisfaction as a product of informal care provision, income and personal characteristics, then expressing the relation between satisfaction and care as a monetary amount. We estimate a positive net effect of providing moderate amounts of informal care. The net effect appears to turn negative for greater high care burdens (over 30 hours/week).We find that carers providing personal care are significantly more satisfied than those primarily giving help with housework. The article adds to the literature in two substantial ways. The first is its quantifying a net benefit to moderately time intensive out-of-home caregivers. The second is its clear demonstration of the importance of heterogeneity of care burden on different subgroups.