Thinking of Incentivizing Care? The Effect of Demand Subsidies on Informal Caregiving and Intergenerational Transfers

We show that demand side cash subsidies to care recipients alter both caregiving and intergenerational transfer decisions. exploit a quasi-natural experiment referring the inception of universal allowance (in 2007 its reduction in 2012). find subsidy (of magnitude 530€ 2011) increase probability informal by 32% (the intensity 13.5 days/year). Similarly, we downstream (upstream) transfers increased (decreased) 29% (15%). The effects concentrate among middle lower income households, were attenuated subsidy.