Newswise — Most families, at some point, will struggle with a decision about how best to provide long-term care for an elderly parent. A new study co-authored by University of Virginia economics professor Steven Stern suggests that you shouldn't assume a home-care professional can better care for your parent than you can.

The study, Stern said, found that elder parents are more likely to describe themselves as "happy" when they are receiving informal in-home care from a child or spouse than when they receive formal in-home care from a nurse, home health aide or other home care professional.

Appearing in the November issue of the International Economic Review, the study examined a data set of about 3,500 households with at least one member age 70 or older who participated in the 1993 wave of a nationally representative, longitudinal survey, the Assets and Health Dynamics Among the Oldest Old.

The comprehensive survey, conducted by the University of Michigan, was designed to facilitate study of older Americans. It includes questions on health, family characteristics (including demographic details of one's spouse and/or children), income and wealth, but does not include any direct measure of health quality. Consequently, self-reported "happiness" was used as a proxy, Stern noted.

Of the 3,500 respondents, 22 percent received some sort of in-home care, 90 percent of which was informal, compared to 18 percent formal. Eight percent received both.

Stern speculated why this self-reported happiness was more prevalent among those receiving informal in-home care from a child or spouse: "A big part of looking at happiness isn't the care per se, but the fact that the kid is involved in it."

Many children of elder parents did not share that insight about how Mom's or Dad's happiness during long-term care may hinge more on sharing time with loved ones than the medical proficiency of a relative stranger.

"The kids who are more educated perceive their own care-giving as not particularly high-quality," Stern said. "They think that formal care is going to be more high-quality."

That attitude may reflect belief in the whole concept of professionalism, the notion that a professional, by definition, will be more skilled at a given task than a nonprofessional.

The same bias is shared by more highly educated parents, who also seem to prefer formal care compared to their less-educated peers, and not just because they can better afford it. They see it as more effective, Stern noted. So, in more educated (and more professional) families, both parents and children are better able to pay for formal care, and may be more inclined to view the formal care as higher quality.

Such assumptions have huge financial implications as Baby Boomers gray and swell the ranks of those needing long-term care. Billions of dollars are at stake, both for society and for family nest eggs, in decisions about whether in-home elder care will be provided informally or formally, notes the study, "Formal Home Health Care, Informal Care, and Family Decision Making." [http://www3.interscience.wiley.com/cgi-bin/fulltext/122663094/HTMLSTART].

Stern's three co-authors are all former students: David Byrne, now with the Federal Reserve Board; Michelle Goeree, who holds joint appointments at the University of Southern California and the University of Zurich in Switzerland; and Bridget Hiedemann of the University of Seattle.

There are variations among those children who provide care to their parents, Stern said.

The average child of an elder parent (over 70) does not want to be a caregiver because the task is seen as burdensome. Among those who do choose to give informal care, the primary motivation is a sense of filial obligation and expectation, Stern said.

Daughters tend to provide higher-quality care and experience less burden and more sense of obligation than sons. As adult children age, he added, they feel less burdened by providing care, but provide lower-quality care.

Mothers are less burdensome to care for than fathers, but care for fathers is more effective than care for mothers (as measured by self-reported happiness).

The study also finds that higher opportunity costs (i.e. giving up a higher salary, more time, etc.) decrease the likelihood that a child will provide care, Stern said, which translates into the only significant racial difference in care-giving. Increased prevalence of informal care among African Americans correlates largely with lower average wages and opportunity costs.

Mothers are more likely than fathers and unmarried parents are more likely than married parents to receive informal care from a child or child-in-law.

After examining the various factors that impact long-term care decision-making, the study modeled how adjustments to public programs (primarily Medicare and Medicaid) might influence family choices of informal versus formal care.

The results suggest that marginal state-by-state variations in Medicaid qualification policies or spending have little effect on long-term care decisions, Stern said, because the decisions are driven primarily by other factors: the potential caregiver's feelings of burden and/or obligation, the opportunity costs of informal care-giving, and judgment of the effectiveness of informal versus formal care.

Medicaid subsidy increases large enough to offset those primary decision-drivers would be so expensive as to not be politically feasible, Stern said.

This study builds on earlier research by Stern [http://www.virginia.edu/insideuva/2002/25/elderly_parents.html], who has spent more than 15 years studying the economics of health care and other social services.

Future research, Stern said, will look at several waves of data from the Assets and Health Dynamics Among the Oldest Old surveys to shed light on how changes over time may impact elder care decision-making. Preliminary results suggest that, as a sibling engages in care-giving, his or her care-giving skills improve, but care-giving motivation declines, Stern said. It's not yet clear whether the "learning" effect or the "burnout" effect is more powerful.

Stern also aims to examine how strategic sibling interactions may impact elder care decision-making. Strategic self-interest (or altruism) might be evident in a number of ways, he said, such as siblings comparing salaries, comparing care-giving skills, an inclination to free ride when one sibling is wealthier and more capable of paying for formal care, or even competition among siblings to spend time providing informal care in hopes of a bequest reward.