We examine how long-term care insurance (LTCI) affects informal care use and expectations among the insured individuals and co-residence and labor market outcomes of their adult children. We address the endogeneity of LTCI coverage by instrumenting for LTCI with changes in state tax treatment of LTCI insurance policies. We do not find evidence of reductions in informal care use over a horizon of approximately eight years. However, we find that LTCI coverage reduces parents' perceptions of the willingness of their children to care for them in the future and that the behavior of adult children changes, with LTCI resulting in lower likelihoods of adult children co-residing and stronger labor market attachment. These findings provide empirical support for the presence of spillovers of LTCI on the economic behaviors of family members.
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| http://www.ncbi.nlm.nih.gov/pmc/articles/PMC10533212 | PMC |
| http://dx.doi.org/10.1016/j.jhealeco.2023.102781 | DOI Listing |
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