A Transaction Cost Approach to Informal Care

Abstract

Research on cooperation and care has largely overlooked the informal care for adults. Informal care is the care for those who experience (mental or physical) health issues. In this contribution we aim to explain the provision of informal care from a transaction cost approach. We do so by investigating the role of coordination problems and trust problems in the supply of informal care from the perspective of the care giver. We also investigate the role of the social embeddedness of the relationship between the care giver and receiver. Using information from 7,166 care givers and non-care givers collected by the Dutch Institute for Social Research and the Central Bureau of Statistics, multivariate analyses are used to test our hypotheses. Results show that less hours of informal care are provided when the complexity of needs is higher. However, unexpectedly, those with more general skills spend less rather than more time of informal care. Our results also suggest that care givers prefer to give informal care to the ones they know and have a close relationship with. Although the findings are mixed, we conclude that informal care provided by the care giver can be viewed upon as a transaction, and give suggestions for further research.