An economic perspective on informal care of the elderly in Malta

Abstract

This research seeks to assign a value to informal care in Malta and to study the topic from an economic perspective. Doing this is crucial for constructing adequate policy responses to social and demographic change. There are two trends which will have an impact on the ability of informal caregivers to continue providing unpaid help. As female labour force participation is increasing the traditional caregiver will be more constrained. At the same time Malta’s population is ageing, which puts greater strain on existing systems of support. The value of informal care is estimated by using the replacement cost method. This method of valuation seeks to provide value for non-market commodities based on the market prices of proxy goods. The estimates are then complemented by survey data on Maltese informal caregivers’ experiences and perceptions of existing services. The study estimates the replacement cost of informal elder care in Malta (for 2011) to be equivalent to 0.81% of GDP, or roughly the same as the 2011 government budget devoted to elderly and community care. The survey data also indicates that 44% of respondents felt a deterioration in their quality of life after having taken on the role of caregiver, and that 40% of respondents made adjustments to their work plans once they became caregivers. The study shows that informal caregiving is valuable to society. At the same time it can also deteriorate caregivers’ quality of life. Government policy could be designed to address the needs of caregivers, by directly supporting informal caregivers in their roles, whilst maintaining the benefits of informal care. However it is clear that more research and data is needed to construct adequate and cost-effective policy responses.