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Abstract
We investigate the relationship between homeownership and institutionalization using longitudinal data from a Dutch community sample (N = 2372) collected between 1992 and 2005, and find a negative effect of housing tenure on the probability of moving to a nursing home between two subsequent waves. Our discrete time duration model is able to deal with time-varying covariates like health and is flexible with respect to time effects. We have detailed information about health status, presence of a partner and children, neighborhood, and housing. The effect of tenure remains significant after controlling for their impact. A variety of additional potential explanations related to housing wealth and the price of long-term care are found to lack explanatory power. We therefore interpret our findings as the result of a strong desire among the homeowners to stay where they are—in their own property—and the better possibilities that they have—as owners—to realize this desire.
Notes
1 The Netherlands has two types of institutions where long-term care is provided: nursing homes and residential care comparable with sheltered housing. The former provides the most intensive types of care. The distinction will be explained in Section 3. In order to keep the terminology simple, we will refer to both types of institutions as nursing homes, unless it is clear from the context that the distinction matters.
2 A surprisingly large number of adults live close to their parents. See Compton & Pollak (Citation2009) for the US and Hank (Citation2007) for the European countries.
3 See Rouwendal (Citation2009, Figure 8).
4 This was the case through the period 1992–2007 to which our data refer, although originally admission to homes-with-care was open to all.
5 This makes it unlikely that homeownership is used as a hedge against rent risk.
6 Since the time between subsequent waves is approximately 3 years, it is possible that some of the 29 moves to nursing homes were in fact moves to a home-with-care followed by a move to a nursing home.
7 It may be noted that the logit-based discrete time hazard model does not belong to the family of proportional hazard models.
8 It may be noted that for all respondents who died during the time window of our study and who were not institutionalized in the last wave in which they were observed, the partner or relatives were asked if the institutionalization had taken place before the respondent's death.
9 This is often referred to as a random effects panel data model. Although for the logit model a fixed effects approach is also possible, estimation is restricted to the observations for which different choices are observed over time. In the context of the present paper, this means that estimation must be based only on respondents who become institutionalized. Right-censored observations cannot be included in the analysis, which is obviously undesirable. We have therefore not used this approach.
10 Over the whole period of observation, 82 owners moved to the rental sector and 24 renters became owners.
11 The role of these dummies is comparable to that of a flexible baseline hazard in continuous duration models.
12 The reason is that there is a linear relationship between time, age, and year of birth.
13 If we include the chronic diseases separately (lung disease, cardiac disease, arteriosclerosis, stroke, diabetes, arthritis, and malignant neoplasm), we see differences in their impact on institutionalization, but only one coefficient becomes significant (that of arteriosclerosis), while the coefficient for homeownership changes hardly (0.60) and remains significant.
14 This variable is equal to 0 when the number of children equals 0, and increases less than proportionally with the number of children.
15 We investigated this issue by introducing a cross effect for being a homeowner before the policy reform in 1997. The hypothesis to be tested was that homeowners had a lower propensity to become institutionalized before 1997. However, the coefficient of this variable was not significant.
16 We investigated this issue by including a cross effect of the number of children and the ownership dummy into the model. The hypothesis to be tested was that homeowners with children would have a lower hazard of becoming institutionalized because their children provide more care than those of otherwise comparable renters because of the strategic bequest motive. However, the coefficient of the cross effect was insignificant and had the wrong (positive) sign.
17 Note that we controlled for the duration of stay in the house.