ABSTRACT
Using the National Mexican Health and Aging Study panel dataset, the authors estimate the effect of having informal care on the probability of dying and on the change in elderly health over a two-year period. Three measures of functional health were used: self-reported health, activities of daily living, and instrumental activities of daily living. We develop an empirical strategy that relies on the panel structure of the dataset to sort out the possible correlation between unobservable characteristics that affect both elderly health and an individual's decision to provide informal care. Our findings suggest that informal care provided by daughters reduces the probability of dying. In addition, informal care provided by daughters reduces the probability of having a decline in activities of daily living and instrumental activities of daily living, while it has no effect on the observed changes in self-reported health status. The protective effect of informal care provided by sons is not statistically significant for any health outcomes. A discussion of the policy options to increase elderly health and to improve the role of caregivers is included.