Association for Public Policy Analysis & Management

One of the key issues facing policymakers in the United States in coming years will be the dramatic aging of the population and the consequent increase in demand for long-term care. Previous work has demonstrated the importance of immigrant workers in filling gaps in the U.S. health workforce[1] (see, e.g, Cortes and Pan 2014; Pittman et al. 2014). However, much less work has been done on immigrant labor supply in the context of long-term care, which is provided primarily by low-wage workers such as Certified Nursing Assistants (CNAs) and home care aides. Anecdotally, there is reason to believe that in the case of the long-term care labor market, immigrant workers may be alleviating shortages and supplying care that would otherwise not be provided. Furtado and Ortega’s (2018) study[2] suggests that is true in the nursing home setting. We are building upon that work by estimating the impact of immigration on utilization of long-term care (including nursing home care, paid home care and informal/unpaid home care).

The challenge in estimating this effect is making sure that immigration patterns are exogenous to demand for long-term care. It would be problematic if, for example, counties with larger long-term care worker shortages try to attract more immigrants to work in the LTC sector. We address this concern by using what is known as a “shift-share” immigration instrument, first developed by Card (2001)[3], as our primary independent variable. This variable, which is constructed using Census and American Community Survey data is a proxy for the share of population in a given area that is immigrant. However, in order to avoid a potential endogeneity problem it is constructed by predicting this share using the distribution of the 1970 population in an area instead of the current one.

To estimate the effect of immigrant share on long-term care utilization, we will use data from the Health and Retirement Study (HRS), a panel survey that follows a representative sample of older Americans who, at the start of our 1998-2014 sample period range in age from 51-56 (War Babies cohort) to over 74 (AHEAD cohort). The detailed information in the HRS allows us not just to observe long-term care that is received, but to identify individuals who are not receiving care but might benefit from it by using information on health status and problems with Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs).

[1] See, e.g., Cortes, Patricia and Jessica Pan. 2014. “Foreign Nurse Important and the Supply of Native Nurses.” Journal of Health Economics 37: 164-180. Pittman, Patricia, Bianca Frogner, Emily Bass and Courtney Dunham. 2014. “International Recruitment of Allied Health Professionals to the United States.” Journal of Allied Health 42(2): 79-87.

[2] Furtado, Delia, Francesc Ortega. 2018. “Do Immigrant Inflows Improve Quality of Care in Nursing Homes?” Working Paper, University of Connecticut. September 22.

[3] Card, David. 2001. “Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration.” Journal of Labor Economics, 19(1): 22-64.