Does long-term care coverage shape the impact of informal care-giving on quality of life? A difference-in-difference approach

The impact that providing care to ageing parents has on adult children's lives may depend on the long-term care (LTC) context. A common approach to test this is to compare whether the impact of care-giving varies between countries with different LTC coverage. However, this approach leaves considerable room for omitted variable bias. We use individual fixed-effects analyses to reduce bias in the estimates of the effects of informal care-giving on quality of life, and combine this with a difference-in-difference approach to reduce bias in the estimated moderating impact of LTC coverage on these effects. We draw on longitudinal data for Sweden and Denmark from the Survey of Health, Ageing and Retirement in Europe (SHARE) collected between 2004 and 2015. Both countries traditionally had generous LTC coverage, but cutbacks were implemented at the end of the 20th century in Sweden and more recently in Denmark. We use this country difference in the timing of the cutbacks to shed light on effects of LTC coverage on the impact care-giving has on quality of life. Our analyses show that care-giving was more detrimental for quality of life in Sweden than in Denmark, and this difference weakened significantly when LTC coverage was reduced in Denmark, but not in Sweden. This suggests that LTC coverage shapes the impact of care-giving on quality of life.