CCHE Seminar Series: Demand for Domestic Help Services: Evidence from a Natural Experiment

Demand for Domestic Help Services: Evidence from a Natural Experiment

Maripier Isabelle
Université Laval

Friday January 28, 2022, 10am-12pm, Zoom

Abstract: We investigate the impact of a reform to a program that provides subsidies for domestic help services, especially for people needing assistance to continue living in their own homes. Implemented  in Quebec (Canada) in October 2016, this reform topped up the financial support given to some beneficiaries of the program by one dollar per hour. We look at this reform’s impact on the decision to employ home support services, and on the number of hours purchased. Drawing on administrative panel data, we exploit this quasi-natural experiment to estimate a difference-in-differences random effect tobit model, for which we derive the average treatment on the treated. Our results suggest that the supplement caused the average hours of domestic help services consumed to increase by ten percent in the long-run, corresponding to a long-run elasticity of 0.89. We document that this increase happens gradually, and takes up to 18 months to reach its full magnitude. We also find that the monthly response is six times larger at the extensive margin than at the intensive margin.

Maripier Isabelle is an assistant professor at the department of Economics at l’Université Laval (Québec, Canada), a researcher at the CERVO brain research centre, and chairholder of the Sentinel North Partnership Research Chair in Economics and Brain Health. Her current research addresses issues at the intersection of economic inequality, health economics and labour economics, with a focus on questions related to brain health and mental health. She is a researcher at CIRANO, and a faculty associate at the Canadian Center for Health Economics.