Tj. Hoerger et al., PUBLIC SUBSIDIES, PRIVATE PROVISION OF CARE AND LIVING ARRANGEMENTS OF THE ELDERLY, Review of economics and statistics, 78(3), 1996, pp. 428-440
We examine the effects of public subsidies on the living arrangements
of the disabled elderly who choose among living independently, living
in an intergenerational household, and entering a nursing home. After
quantifying effects of state policies on each arrangement, we estimate
the model using multinomial probit and data from the National Long-Te
rm Care Survey. Direct subsidies for nursing home care and state polic
ies which limit nursing home beds or reimbursement significantly affec
t the choice of living arrangement. State policies which subsidize com
munity living have little effect on nursing home entry, although they
increase the probability of living independently.