The Effect of Free Elderly Personal Care on Informal Caregiving and Labour Market Participation: Revisiting the Scottish Reform

Abstract: We revisit the Scottish care reform of 2002 to estimate the effect of free formal personal care for the elderly on informal caregiving and labour market participation using a difference-in-differences approach. We find that previous studies’ results suffer from bias due to violations of identifying assumptions. As a result, the effects on informal care are inconclusive. Nonetheless, we identify a causal effect of the reform on employment.