Informal and formal care for elderly persons: How adult childrenʹs characteristics affect the use of formal care in Japan

Informal care by adult children remains the most common source of caregiving for elderly parents in Japan, even after the introduction of long-term care insurance in 2000. We estimate how the potential supply of child caregivers affects the use of formal care of elderly parents, focusing on the differences across children. We find that the effects of childrenʹs presence vary substantially with gender, marital status, and opportunity costs of children. The potential supply of daughters-in-law, as the traditional source of informal care, is less important in providing care than that of unmarried children. The opportunity costs of children make a difference in the use of formal long-term care.