The role of culture in long-term care arrangement decisions

In this paper, we show how and to what extent cultural factors may influence the LTC market and elderly living arrangements. Using a spatial regression discontinuity design, we exploit the within-state variation in language groups in Switzerland to provide evidence about cultural differences in LTC use. We show that elderly people residing in regions speaking a Latin language (French, Italian and Romansh) enter nursing homes in worse health conditions and rely more on home-based care compared to elderly people residing in the neighboring German regions. Differences in the strength of family ties across linguistic groups represent the most reasonable explanation for such differences.