Date of Award

June 2015

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Public Administration

Advisor(s)

Douglas A. Wolf

Keywords

Adult Children, Caregiving, Long-Term Care, Medicaid, Physical Activity, Wealth

Subject Categories

Social and Behavioral Sciences

Abstract

Situated in the context of a rapidly aging population, this dissertation examines the implications of supplying long-term care (LTC) services to the elderly in the United States. The first two essays investigate private costs of LTC assistance borne by adult children of elderly parents. In contrast, the third essay focuses on the cost of publicly-provided, formal LTC services.

The first essay analyzes whether adult children devote less time to exercise as time allocation in parental caregiving increases. The empirical model is a system of four correlated equations, where the dependent variables are hours spent caregiving, frequency of moderate and vigorous physical activity, and hours spent in paid work. I use pooled cross-sectional data from the Health and Retirement Study (HRS) for this analysis. Results from joint estimation of the four equations indicate limited evidence of a competition between time spent in caregiving and frequency of physical activity. Parental factors that increase allocation of care time to parents do not comprehensively induce reductions in the frequency of any type of physical activity, nor in hours of work, among either men or women.

The second essay goes beyond time resources and examines whether dementia onset in parents leads to a reduction in adult children’s household wealth. Towards this, I construct a longitudinal dataset from seven waves of HRS. Estimates from unconditional quantile regressions indicate that parental dementia substantially reduces household wealth of an unmarried adult child in the upper quantiles of the wealth change distribution in the first two years after parental diagnosis. These effects are more pronounced for unmarried adult children without siblings. Further, this response is observed to persist in the subsequent time period as well. An examination of mechanisms suggests that both, losses in labor income and nursing home expenditures, may play a role in leading to wealth declines. This paper makes two contributions: first, it focuses on a broader outcome of private cost, and second, unlike previous studies, it does not limit the analysis to adult children who are informal caregivers.

The final essay examines the cost implications of publicly provided formal care services. Medicaid’s Personal Care Services (PCS) State Plan benefit is a key mechanism through which states provide personal assistance services to eligible beneficiaries. But, it is widely claimed that states are reluctant to adopt the program over fears of runaway spending. Surprisingly, there has been very little empirical work on examining the effect of the PCS State Plan benefit on Medicaid expenditures. Using aggregate state-level data from 1975 through 2009, this study finds that PCS State Plan adoption had no overall effect on Medicaid expenditures, except briefly during the early-growth years in 1980s. Further, findings suggest that states make decisions to adopt the program based on financial experiences of other adopting states. This study provides evidence consistent with the interpretation that when faced with the dilemma of balancing increased access and uncontrolled expenditures, state officials adapt the design of an entitlement benefit in an effort to make it less expensive.

In its entirety, the dissertation provides new thinking on two dominant themes in conventional long-term care research: “caregiver burden” and “woodwork effect.” In particular, the results of the first and third essay question the presence of “caregiver burden” and “woodwork effect” respectively, while the third essay challenges the pervasiveness of “caregiver burden” among unmarried adult children. These findings, which in some aspect are unexpected in the context of existing literature, have important implications for policy intervention and the direction of future research efforts in this area.

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