An Informal Care Leave Arrangement- An Economic Evaluation

by Kebebew Negera Ameyu

Institution: University of Oslo
Year: 1000
Keywords: VDP::806
Record ID: 1274736
Full text PDF: https://www.duo.uio.no/handle/10852/30377


The objective of this study is to investigate whether an informal care leave arrangement (ICLA) is socially profitable or not. A methodology for doing such an analysis is Cost-Benefit analysis where all social benefits and costs are estimated, so they can be subtracted to arrive at the net social value. In this study, due to severe data limitations, only some benefits and costs are included in our analysis, making it a restricted cost-benefit analysis. In addition, several assumptions are made to arrive at estimates for costs and benefits. The two main scenarios (the optimistic scenario and the pessimistic scenario) of our analysis differ with respect to which particular assumptions are made concerning (i) the average utilization of the informal leave care arrangement, (ii) the degree to which informal care postpones the need for formal institutional care, and (iii) how the employment participation rate is affected by the informal care leave arrangement. The annual net social value for an individual participating in the informal care leave arrangement for the two scenarios in our restricted cost-benefit analysis are: 4305 Norwegian kroner (optimistic scenario) and - 9243 Norwegian kroner (pessimistic scenario). It follows that depending on the assumptions made, the informal care leave arrangement can be both socially profitable or/and socially unprofitable.