How would informal caregivers react to an increase in formal home-care use by their elderly dependent relatives in France?

This paper focuses on the trade-o between formal and informal care for disabled elderly people living at home in France. Using the French 2008 household Disability - Healthcare data (Handicap Sant e M enages - HSM 2008), we aim to elucidate the e ect of an increase in formal home-care hours on the participation of informal caregivers. We expand on the previous literature, which almost exclusively focuses on the e ect of informal care on formal home care. We estimate a bivariate Tobit model to account for both the censor and the potential endogeneity of our formal home-care vari- able. Our results con rm that crowding out of informal caregivers arises when the elderly dependent receives more hours of formal home care. Nevertheless, the crowding out of informal caregivers that arises when only personal formal home care increases is much weaker. Such crowding out can be interpreted negatively as a renouncement of informal caregivers, but it may also allow some of these caregivers to work more or re-enter the labor market.