Formal and Informal Care: Complementary or Substitutes in Care for Elderly People? Empirical Evidence From China

To integrate the care resources of the elderly, while promoting the development of formal social care resources, some countries have gradually turned to the development of family informal care resources. In China, informal family care has a more important role, whereas social formal care resources are far from meeting the needs of older people. Thus, this strategy can only be effective if there is a clear complementary relationship between informal care and formal care. Empirical analysis is selected from the China Health and Nutrition Survey (CHNS) database, which conducted 10 follow-up surveys in 12 provinces and municipalities in China. A two-tier stochastic frontier (TSFA) model was used to analyze the relationship between three different kinds of formal care and informal family care. The formal complementary and substitute effects on informal care eventually led to higher actual informal care level. The net effect of formal care on informal care is positive, and the complementary effects of formal care are still dominant even in different regions. Increasing informal care does not crowd out or reduce formal care; thereby, facilitating the return of care to families can effectively reduce public service expenditures.