older people’s participation in disability benefits: targeting, timing and financial wellbeing...

Older people’s participation in disability benefits: targeting, timing and financial wellbeing

Francesca ZantomioCa’ Foscari University of Venice

francesca.zantomio@unive.it

New Directions in Welfare 2011, Paris

MotivationProvision and funding of social care for the elderly, in the light of population ageing

Public provision for older people with disabilities in the UKAttendance Allowance (AA)

Cash additions to means-tested programsLocal Authorities’ provision of care

Are (extra-costs) disability benefits in cash an effective form of support for the elderly?

Research questions

• Targeting: is entry into AA responsive to changes in potential claimants’ disability status ?

• Timing: how long does it take to claim AA, after the onset of disability? Who takes longer to claim AA, after the onset of disability?

• Perceived financial wellbeing: is AA making a difference to recipients?

Attendance AllowanceEligiblity aged 65+

need of care as a consequence of disabilitynon means-tested

Award £300 monthly if need care throughout day and night £200 monthly if need care throughout either day or night

Timing of claim and receipt

Request application packCounts as date of claim if form returned by 6 weeksAdministration takes 24 working days to process claimReceipt starts after the eligibility condition has lasted for

6 months

DataBritish Household Panel Survey data, waves 1-17

Range of health state indicators:

Self reported health statusActivities of Daily Living (ADL)Specific health problemsInformal care receivedRegistered or self-reported disabled Use of health services (GP visits, hospital days, other)Number of serious accidentsInterviewer’s report of physical difficultiesMental distress

Financial resources

Whether has received AA since September of the previous year

Sample selection

• Respondents aged 65+, at risk of AA eligibility

• Exclude cases:In receipt of DLAUnobserved in year prior to first reported receipt of AA

• Endogenous selection?

• Sample size: 5,334 individuals; 1,009 entries into AA (absorbing state)

Targeting: who receives AA?

Targeting: who receives AA?Disability indicator

Targeting: who receives AA?

Timing: gap between disability onset (after 65+) and first AA receipt

Timing: gap between disability onset (after 65+) and first AA receipt

Outcomes after receiptAA meant to support the “extra-costs” of disability: does it make a

difference to recipients’ perceived financial wellbeing?

Exploit the imperfect targeting features of AA (AA award as a “lottery” for observationally equivalent individuals)

Compare the later outcomes of - AA entrants at a given point in time t with those of - observationally equivalent individuals who, despite facing the same risk of AA entry in t, have not entered the program, at least up to t

Assume no unobserved confounding determinant of selection into AA entry in t

Estimate propensity score for entry in AA in t, wave by wave, to build appropriate control group– no replacement– 0.05 caliper

Conclusions Entry into AA is highly responsive to previous changes in

disability status

AA enhances recipients’ perceived financial wellbeing

However

Personal and household characteristics, unrelated to eligibility, do affect the benefit assignment mechanisms, raising horizontal equity concerns

Considerable delays in claiming are also found which, given the low life expectancy of disabled elderly, might severely compromise the effectiveness of the program

Measurement error in AA receipt

0.0

2.0

4.0

6In

re

ceip

t of A

A

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100Age

Uncleaned

0.0

2.0

4.0

6In

re

ceip

t of A

A

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100Age

Cleaned

Disentangle AA and DLA receipt

Estimated probability distribution - delay in receipt of AA